Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 06, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AquaVenture Holdings Ltd | |
Entity Central Index Key | 0001422841 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 26,950,744 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 47,357 | $ 56,618 |
Trade receivables, net of allowances of $1,019 and $1,034, respectively | 22,578 | 21,437 |
Inventory | 14,770 | 15,496 |
Current portion of long-term receivables | 7,099 | 6,538 |
Prepaid expenses and other current assets | 10,154 | 8,272 |
Total current assets | 101,958 | 108,361 |
Property, plant and equipment, net | 149,493 | 150,064 |
Construction in progress | 17,538 | 15,427 |
Right-of-use assets | 8,549 | |
Restricted cash | 4,211 | 4,153 |
Long-term receivables | 38,250 | 40,574 |
Other assets | 7,696 | 6,251 |
Deferred tax asset | 4,206 | 4,191 |
Intangible assets, net | 200,251 | 205,443 |
Goodwill | 191,178 | 190,999 |
Total assets | 723,330 | 725,463 |
Current Liabilities: | ||
Accounts payable | 6,918 | 8,235 |
Accrued liabilities | 21,452 | 25,116 |
Current portion of long-term debt | 6,574 | 6,494 |
Deferred revenue | 4,298 | 3,890 |
Total current liabilities | 39,242 | 43,735 |
Long-term debt | 312,112 | 313,215 |
Deferred tax liability | 18,555 | 18,465 |
Other long-term liabilities | 12,780 | 13,450 |
Operating lease liabilities, non-current | 7,724 | |
Total liabilities | 390,413 | 388,865 |
Commitments and contingencies (see Note 9) | ||
Shareholders' Equity | ||
Ordinary shares, no par value, 250,000 shares authorized; 26,934 and 26,780 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | ||
Additional paid-in capital | 583,990 | 582,127 |
Accumulated other comprehensive income | (301) | (421) |
Accumulated deficit | (250,772) | (245,108) |
Total shareholders' equity | 332,917 | 336,598 |
Total liabilities and shareholders' equity | $ 723,330 | $ 725,463 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Allowances | $ 1,019 | $ 1,034 |
Common stock par value | $ 0 | $ 0 |
Common stock authorized | 250,000 | 250,000 |
Common stock issued | 26,934 | 26,780 |
Common stock outstanding | 26,934 | 26,780 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total revenues | $ 46,562 | $ 32,514 |
Cost of revenues | 22,247 | 15,489 |
Gross profit | 24,315 | 17,025 |
Selling, general and administrative expenses | 22,869 | 19,574 |
Income (loss) from operations | 1,446 | (2,549) |
Other expense: | ||
Interest expense, net | (6,560) | (3,250) |
Other income (expense), net | 51 | (140) |
Loss before income tax expense | (5,063) | (5,939) |
Income tax expense (benefit) | 601 | 407 |
Net loss | (5,664) | (6,346) |
Other comprehensive income: | ||
Foreign currency translation adjustment | 120 | (83) |
Comprehensive loss | $ (5,544) | $ (6,429) |
Loss per share – basic and diluted | $ (0.21) | $ (0.24) |
Weighted-average shares outstanding – basic and diluted | 26,865 | 26,491 |
Bulk water | ||
Total revenues | $ 14,310 | $ 13,696 |
Cost of revenues | 6,582 | 6,507 |
Gross profit | 7,728 | 7,189 |
Rental | ||
Total revenues | 21,807 | 13,959 |
Cost of revenues | 9,606 | 6,456 |
Gross profit | 12,201 | 7,503 |
Product sales | ||
Total revenues | 9,473 | 3,811 |
Cost of revenues | 6,059 | 2,526 |
Gross profit | 3,414 | 1,285 |
Financing | ||
Total revenues | 972 | 1,048 |
Gross profit | $ 972 | $ 1,048 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Ordinary Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2017 | $ 568,593 | $ (17) | $ (224,380) | $ 344,196 | |
Beginning Balance (in shares) at Dec. 31, 2017 | 26,482 | ||||
Equity Rollforward | |||||
Issuance for share-based compensation, net of forfeitures (in shares) | 19 | ||||
Issuance of share-based compensation, net of forfeiture | (112) | (112) | |||
Exercise of options | 15 | 15 | |||
Exercised (number of shares) | 2 | ||||
Share-based compensation | 3,283 | 3,283 | |||
Net loss | (6,346) | (6,346) | |||
Foreign currency translation adjustment | (83) | (83) | |||
Ending Balance at Mar. 31, 2018 | 571,779 | (100) | (230,726) | 340,953 | |
Ending Balance (in shares) at Mar. 31, 2018 | 26,503 | ||||
Beginning Balance at Dec. 31, 2018 | 582,127 | (421) | (245,108) | 336,598 | |
Beginning Balance (in shares) at Dec. 31, 2018 | 26,780 | ||||
Equity Rollforward | |||||
Issuance for share-based compensation, net of forfeitures (in shares) | 72 | ||||
Issuance of share-based compensation, net of forfeiture | (620) | (620) | |||
Exercise of options | 1,472 | 1,472 | |||
Exercised (number of shares) | 82 | ||||
Share-based compensation | 1,011 | 1,011 | |||
Net loss | (5,664) | (5,664) | |||
Foreign currency translation adjustment | 120 | 120 | |||
Ending Balance at Mar. 31, 2019 | $ 583,990 | $ (301) | $ (250,772) | $ 332,917 | |
Ending Balance (in shares) at Mar. 31, 2019 | 26,934 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (5,664) | $ (6,346) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 11,958 | 7,860 |
Share-based compensation expense | 1,011 | 3,283 |
Provision for bad debts | 186 | 249 |
Deferred income tax provision | 77 | (155) |
Inventory adjustment | 60 | 52 |
Loss on disposal of assets | 529 | 553 |
Amortization of deferred financing fees | 254 | 239 |
Other | 33 | 12 |
Change in operating assets and liabilities: | ||
Trade receivables | (1,325) | 1,103 |
Inventory | 671 | (512) |
Prepaid expenses and other current assets | (1,200) | 708 |
Long-term receivable | 1,722 | 1,656 |
Right-of-use assets | 416 | |
Other assets | (2,358) | (1,023) |
Current liabilities | (6,599) | (2,717) |
Operating lease liabilities, non-current | (257) | |
Long-term liabilities | 57 | 122 |
Net cash (used in) provided by operating activities | (429) | 5,084 |
Cash flows from investing activities: | ||
Capital expenditures | (7,177) | (2,847) |
Proceeds from sale of fixed assets | 11 | |
Net cash paid for acquisition of assets or business | (6,653) | |
Net cash used in investing activities | (7,166) | (9,500) |
Cash flows from financing activities: | ||
Payments of long-term debt | (1,640) | (1,808) |
Payment of deferred financing fees | (71) | |
Payments of secured borrowings | (158) | |
Payments of acquisition contingent consideration | (670) | |
Proceeds from exercise of stock options | 1,472 | 15 |
Shares withheld to cover minimum tax withholdings on equity awards | (620) | (112) |
Net cash used in financing activities | (1,616) | (1,976) |
Effect of exchange rates on cash, cash equivalents and restricted cash | 8 | (7) |
Change in cash, cash equivalents and restricted cash | (9,203) | (6,399) |
Cash, cash equivalents and restricted cash at beginning of period | 60,771 | 122,359 |
Cash, cash equivalents and restricted cash at end of period | $ 51,568 | $ 115,960 |
Description of the Business
Description of the Business | 3 Months Ended |
Mar. 31, 2019 | |
Description of the Business | |
Description of the Business | 1. Description of the Business AquaVenture Holdings Limited is a British Virgin Islands (“BVI”) company, which was formed on June 17, 2016 for the purpose of completing an initial public offering (“IPO”) as the U.S. Securities and Exchange Commission (the “SEC”) registrant and carrying on the business of AquaVenture Holdings LLC and its subsidiaries. AquaVenture Holdings Limited and its subsidiaries (collectively, “AquaVenture” or the “Company”) provides its customers Water‑as‑a‑Service ® (“WAAS ® ”) solutions through two operating platforms: Seven Seas Water and Quench. Both operations are critical to AquaVenture, which is headquartered in the BVI. Seven Seas Water offers WAAS solutions by providing outsourced desalination, wastewater treatment and water reuse solutions to governmental, municipal (including utility districts), industrial, property developer and hospitality customers. Seven Seas Water’s desalination solutions utilize reverse osmosis and other purification technologies to produce potable and high purity industrial process water in high volumes for customers operating in regions with limited access to potable water. Through this outsourced desalination service model, Seven Seas Water assumes responsibility for designing, financing, constructing, operating and maintaining the water treatment facilities. In exchange, Seven Seas Water enters into long‑term agreements to sell to customers agreed‑upon quantities of water that meet specified water quality standards. For its wastewater treatment and water reuse solutions, Seven Seas Water designs, fabricates and installs plants which can be sold or leased to customers for a contractual term. The wastewater treatment and water reuse solutions offered include scalable modular treatment plants, field-erected plants and temporary bypass plants. Seven Seas Water currently operates in the Caribbean region, the United States and in South America and is pursuing new opportunities in North America, the Caribbean, South America, Africa, the Middle East and other select markets. Seven Seas Water is supported by operations centers in Tampa, Florida and Houston, Texas, which provide business development, engineering, field service support, procurement and administrative functions. Quench offers WAAS solutions by providing bottleless filtered water coolers and related services through direct and indirect sales channels. Through its direct sales channel, Quench primarily rents and services point-of-use (“POU”) units to institutional and commercial customers. Quench’s typical initial rental contract ranges from two to four years in duration and contains an automatic renewal provision. Quench’s indirect sales channel provides POU systems, filters, parts and services to networks of approximately 250 dealers and retailers. Quench primarily operates throughout the United States and Canada. Quench is supported by an operations center in King of Prussia, Pennsylvania, which provides marketing and business development, field service and supply chain support, customer care and administrative functions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Unless otherwise noted below, there have been no material changes to the accounting policies presented in Note 2—“Summary of Significant Accounting Policies” of the notes to the audited consolidated financial statements, included in Item 8. Financial Statements and Supplementary Data of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as amended. Basis of Presentation The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as amended. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation of the Company’s unaudited condensed consolidated balance sheet as of March 31, 2019, the unaudited condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2019 and 2018, the unaudited condensed consolidated statements of changes in equity for the three months ended March 31, 2019 and 2018, and the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2019 and 2018. The unaudited condensed consolidated balance sheet as of December 31, 2018 was based on the audited consolidated balance sheet as of December 31, 2018, as presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as amended. The unaudited condensed consolidated financial statements include the accounts of AquaVenture Holdings Limited and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include: accounting for revenue from contracts with customers and the determination of transaction prices and allocation of revenues to remaining performance obligations; accounting for leases and the determination of operating lease liabilities and right-of-use assets; accounting for goodwill and identifiable intangible assets and any related impairment; property, plant and equipment and any related impairment; contract costs and any related impairment; share‑based compensation; allowance for doubtful accounts; obligations for asset retirement; acquisition contingent consideration; and valuation of deferred income taxes. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. Leases Lessee accounting The Company leases space and operating assets, including offices, office equipment, warehouses, storage yards and storage units under non-cancelable operating leases. The Company accounts for these leases in accordance with the authoritative guidance adopted as of January 1, 2019. Please see “Adoption of New Accounting Pronouncements” section below for information regarding this adoption. At the time of contract inception, the Company determines if an arrangement is or contains a lease. If the arrangement contains a lease, the Company recognizes a right-of-use asset and an operating lease liability at the lease commencement date. Lease expense for lease payments made is recognized on a straight-line basis over the lease term. The operating lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date. The current portion of the Company’s operating lease liabilities are recorded within accrued liabilities in the consolidated balance sheets. The right-of-use asset is initially measured at cost, which is comprised of the initial amount of the operating lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. The right-of-use asset is subsequently measured throughout the lease term at the carrying amount of the operating lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Right-of-use assets are periodically reviewed for impairment whenever events or changes in circumstances arise. During the three months ended March 31, 2019, the Company had incurred no impairment charges related to right-of-use assets. Key estimates and judgments in determining both the operating lease liability and right-of-use asset include the determination of (i) the discount rate it uses to discount the unpaid lease payments to present value, (ii) the lease term and (iii) the lease payments. The discount rate applied to the unpaid lease payments is the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s deferred initial direct costs. Therefore, the Company generally derives an incremental borrowing rate as the discount rate for the lease. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease term for the Company’s leases includes the noncancelable period of the lease, plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Lease payments included in the measurement of operating lease liabilities are comprised of the following: · fixed payments; · variable lease payments that depend on an index or rate, initially measured using the index or rate at the lease commencement date; and · the exercise price of a Company option to purchase the underlying asset if the Company is reasonably certain to exercise the option. In certain instances, the Company's leases include non-lease components, such as equipment maintenance or common area maintenance. As part of its adoption of authoritative guidance on leases on January 1, 2019, the Company has not elected the practical expedient to account for the lease and non-lease components as a single lease component and has elected (for all classes of underlying assets) to account for these components separately. The Company allocates the consideration in the contract to the lease and non-lease components based on each component's relative standalone price. The Company determines standalone prices for the lease components based on the prices for which other lessors lease similar assets on a standalone basis. The Company determines standalone prices for the non-lease components based on the prices that suppliers might charge for those types of services on a standalone basis. If observable standalone prices are not readily available, the Company estimates the standalone prices maximizing the use of observable information. The Company has elected to utilize the short-term lease exemption and not recognize a right-of-use asset and corresponding operating lease liability for leases with expected terms of 12 months or less. The Company recognizes the lease payments associated with its short-term leases on a straight-line basis over the lease term. Lessor accounting The Company generates revenues through the lease of its bulk water facilities, wastewater treatment and water reuse equipment, and filtered water and related systems equipment to customers. In certain instances, the Company enters into a contract with a customer but must construct the underlying asset, including bulk water facilities and wastewater treatment and water reuse equipment, prior to its lease. At the time of contract inception, the Company determines if an arrangement is or contains a lease. Customer contracts that contain leases, which can be explicit or implicit in the contract, are generally classified as either operating leases or sales-type leases and can contain both lease and non-lease components, including operating and maintenance services (“O&M”) of the Company-owned equipment. As part of its adoption of authoritative guidance on leases on January 1, 2019, the Company elected the practical expedient for all classes of underlying assets to not separate the lease and non-lease components if certain conditions are met, including the classification of the lease component as operating and the revenue recognition pattern of both the lease and non-lease components. The Company will account for the contract with the customer as a combined component under the respective authoritative guidance for the predominant element in the contract, the lease or non-lease component. For leases classified as sales-type leases, the Company allocates the transaction price based on the relative standalone selling prices of the identified performance obligations. If the customer contract contains or is accounted for as a lease, the key estimates and judgments used by the Company in accounting for the lease as a lessor include the following: (i) lease term, (ii) the economic life of the underlying leased asset, (iii) determination of lease payments and (iv) determination of the fair value at the time of contract inception and the residual fair value of the underlying leased asset. The lease term for the Company’s leases includes the noncancelable period of the lease, plus any additional periods covered by either a lessee option to extend (or not to terminate) the lease that the lessee is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the Company. Contracts entered into with customers can include either the option to renew or an auto-renewing provision that results in the automatic extension of the existing contract. In certain instances, key provisions such as the lease payment or term of the renewal are not stated and are subject to negotiation. The economic life of the underlying leased asset is determined to be either the period over which the asset is expected to be economically usable, or where the benefits it can produce exceed the cost to replace or undertake major repairs. In certain instances, the economic life of the underlying leased asset can exceed the useful life assigned by the Company. Lease payments that are accounted for as rental revenue are comprised of the following: · fixed payments; · variable lease payments that depend on an index or rate, initially measured using the index or rate at the lease commencement date; · the exercise price of a lessee option to purchase the underlying asset if the lessee is reasonably certain to exercise the option; and · payments for penalties for the termination of a lease if the term reflects the lessee terminating the lease; and The Company’s leases do not typically include a requirement for the customer to guarantee the residual value of the underlying leased asset. Variable lease payments that do not depend on an index or rate are excluded from the determination of lease payments. The fair value of the underlying leased asset at contract inception and residual fair value of underlying leased asset at the end of the term of the lease are determined based on the price that would be received to sell an asset in an orderly transaction at the time of valuation. The Company’s risk management strategy for protecting the residual fair value of the underlying assets include the ongoing maintenance by the Company during the lease term as well as clauses and other protections within the lease agreements which require the lessee to return the underlying asset in working condition at the end of the lease term. At contract inception, the Company determines the lease classification of the underlying asset. The Company considers inputs such as the lease term, lease payments, fair value of the underlying asset and residual fair value of the underlying asset when assessing the classification. The discount rate applied to the unpaid lease payments is the interest rate implicit in the lease. The rate implicit in the lease is the rate of interest that, at a given date, causes the aggregate present value of (a) the lease payments and (b) the amount that the Company expects to derive from the underlying asset following the end of the lease term to equal the sum of (1) the fair value of the underlying asset minus any related investment tax credit retained and expected to be realized by the Company and (2) any deferred initial direct costs of the Company. In certain instances, contracts with customers may also include the option for the customer to purchase the underlying asset at the end of the lease term. When applicable and certain conditions are met, the Company will incorporate the stated purchase price into the determination of its implied interest rate. Revenue Recognition Through the Seven Seas Water and Quench operating platforms, the Company generates revenues from the following primary sources: (i) bulk water sales and services; (ii) service concession arrangements; (iii) rental of equipment; and (iv) product sales. The revenue recognition policy for each of the primary sources of revenue are as follows: Bulk Water Sales and Services. Through the Seven Seas Water operating platform, the Company enters into contracts with customers with a single performance obligation to deliver bulk water or a series of performance obligations to perform substantially the same services with the same pattern of transfer, which can include the operations and maintenance (“O&M”) of a customer-owned or leased plant. The Company recognizes revenues from the delivery of bulk water or the performance of bulk water services at the time the water or services are delivered to the customers in accordance with the contractual agreements. Billings to the customer for both bulk water and the bulk water services are typically based on the volume of water supplied to a customer and typically contain a minimum monthly charge provision which allows the Company to invoice the customer for the greater of the water supplied or a minimum monthly charge. The volume of water supplied is based on meter readings performed at or near the end of the month. The transaction price calculated for bulk water sales and service can include, if applicable, contractual minimum monthly charges and the expected amount of variable consideration to the extent it is probable that a significant reversal of the cumulative revenue will not occur. The variable consideration generally includes the amount of water in excess of contractual minimum volumes, if applicable, or the amount of water expected to be supplied at contractually established rates. Estimates of revenue for unbilled water are recorded when meter readings occur at a time other than the end of a period. A contract asset or liability may be recognized in instances where there is a difference between the amount billed to a customer and the revenue recognized for the completed O&M performance obligations during the period. Revenues generated from both the delivery of bulk water and performance of services related to bulk water are recorded as bulk water revenue within the consolidated statements of operations and comprehensive income. Certain contracts with customers which require the construction of facilities to provide bulk water to a specific customer include two performance obligations, including an implicit lease for the bulk water facilities and bulk water services, and a non-lease component related to O&M services. The implicit lease performance obligation is generally accounted for as an operating lease as a result of the provisions of the contract. As the bulk water services are deemed to be the more predominant element, the Company considers the arrangement to be a combined bulk water component. The calculated transaction price can include, if applicable, contractual minimum monthly charges and the expected amount of variable consideration to the extent it is probable that a significant reversal of the cumulative revenues will not occur. The variable consideration generally includes the amount of water in excess of contractual minimum volumes, if applicable, or the amount of water expected to be supplied and contractually established rates. The revenue recognition pattern for both the lease and non-lease components are the same, with revenues being recognized ratably over the contract period as delivered to the customer. Revenues generated from both the lease and non-lease performance obligations are recorded as bulk water revenue within the consolidated statements of operations and comprehensive income. Service Concession Arrangements. Through the Seven Seas Water operating platform, the Company enters into contracts with customers that are determined to be service concession arrangements. Service concession arrangements are agreements entered into with a public sector entity which controls both (i) the ability to modify or approve the services and prices provided by the operating company and (ii) beneficial entitlement to, or residual interest in, the infrastructure at the end of the term of the agreement. Service concession arrangements typically include more than one performance obligation, including the construction of infrastructure for the customer and an obligation to provide O&M services for the infrastructure constructed for the customer. Billings to the customer for service concession arrangements are typically based on the volume of water supplied to a customer and typically contain a minimum monthly charge provision which allows the Company to invoice the customer for the greater of the water supplied or a minimum monthly charge. The volume of water supplied is based on meter readings performed at or near the end of the month. The transaction price calculated for service concession arrangements includes, if applicable, contractual minimum monthly charges and the expected amount of variable consideration to the extent it is probable that a significant reversal of the cumulative revenues will not occur. The variable consideration generally includes the amount of water in excess of contractual minimum volumes, if applicable, or the amount of water expected to be supplied at contractually established rates. The transaction price is allocated to the identified performance obligations based on the relative standalone selling prices of the identified performance obligations. The transaction price allocated to the construction of infrastructure performance obligation is recognized as product sales within the consolidated statements of operations and comprehensive income. Product sales are recognized over time, using the input method based on cost incurred, which typically begins at commencement of the construction with revenue being fully recognized upon the completion of the infrastructure as control of the infrastructure is, or is deemed to be, transferred to the customer. In addition, service concession contracts typically include a difference in timing of when control is, or is deemed to be, transferred and the collection of cash receipts, which are collected over the term of the entire arrangement. The timing difference could result in a significant financing component for the construction performance obligations if determined to be a material component of the transaction price. If a significant financing component is identified, the future cash flows included in the transaction price allocated to the construction performance obligations are discounted using a discount rate comparable to a market-based borrowing rate specific to both the customer and terms of the contract. The resulting present value of the allocated future cash flows is recorded as construction revenue with a related long-term receivable as control of the infrastructure is, or is deemed to be, transferred to the customer while the discount amount is considered to be the significant financing component. Future cash flows received from the customer related to the construction performance obligations are bifurcated between principal repayment of the long-term receivable and the related imputed interest income related to the customer financing. The interest income is recorded as financing revenue within the consolidated statements of operations and comprehensive income as providing financing to our customers is a core component of our business model. The transaction price allocated to the O&M performance obligation is recorded as bulk water revenue within the consolidated statements of operations and comprehensive income as the services are provided to the customer. A contract asset or liability may be recognized in instances where there is a difference between the amount billed to a customer and the revenue recognized for the completed O&M performance obligations during the period. Rental of Equipment. Through the Seven Seas Water and Quench operating platforms, the Company generates revenues through the rental of its wastewater treatment and water reuse equipment and filtered water and related systems to customers. Rental agreements classified as operating leases can contain both lease and non-lease components, including O&M services on Company-owned equipment. For rental agreements that meet all conditions of the elected practical expedient to not separate lease and non-lease components and where the lease component is determined to be the predominant element of the contract, the Company allocates all revenues under the contract to the lease component of the contract. Billings to the customer for the rental of this equipment, which generally occur either monthly or quarterly, are based on the rental rate as stated within the rental agreement. The transaction price is based on the minimum lease payment as stated within the rental agreement. Rental revenues, including revenues in connection with certain installation type activities are recognized ratably over the rental agreement term and amounts paid by customers in excess of recognizable revenue are recorded as a contract liability, or deferred revenue, in the consolidated balance sheets. Certain revenues associated with shipping, delivery, installation or similar activities that occur prior to lease commencement do not provide a service to the lessee and are not a non-lease component of the contract. Payments for these activities are recorded as prepaid lease payments which are recognized ratably with the rental revenue over the lease term. Upon the expiration of the initial rental agreement term, the Company may enter into rental agreement extensions in which revenues are recognized ratably over the extension term. Revenues generated under these rental agreements are recorded as rental revenue within the consolidated statements of operations and comprehensive income. Product Sales. Through both the Seven Seas Water and Quench operating platforms, the Company enters into contracts to construct desalination and wastewater treatment and water reuse equipment and facilities and to sell customers water and related filtration equipment, coffee and consumables, which may include contracts accounted for as sales-type leases. Contracts with customers to sell water and related filtration equipment and coffee and consumables typically include a single performance obligation. The Company recognizes revenues at the time the equipment, coffee or consumables is transferred to the customer, which can be upon either shipment or delivery to the customer. The transaction price is based on the contractual price with the customer. Shipping and handling costs paid by the customer are included in revenues. Billings to the customer for the sale of water and related filtration equipment, coffee and consumables occur at the time the product is transferred to the customer and are based on contract price. Contracts with customers to construct desalination and wastewater treatment and water reuse equipment and facilities typically include a single performance obligation. Construction and equipment revenues are recognized over time, using the input method based on cost incurred, which typically begins at the later of commencement of the construction or at the time the infrastructure is or is deemed to be transferred to the customer with revenue being fully recognized upon the completion of the infrastructure. Billings to the customer to construct desalination and wastewater treatment and water reuse equipment and facilities can occur at contractual intervals throughout the construction period, at the time the equipment or facility is deemed transferred to the customer, or, in the case of sales-type leases, as stated within the rental agreement. The transaction price is based on the contractual price with the customer. For contracts deemed to be, or that include a sales-type lease, the transaction price is based on the minimum lease payments as stated within the rental agreement. For contracts that contain both a lease and non-lease components, the transaction price is allocated based on the relative standalone selling prices of the lease and non-lease components. The transaction price, excluding variable lease payments, allocated to the lease component is discounted at the implicit rate of the contract and is recognized as revenue upon commencement of the lease. Revenues generated under these contracts are recorded as product sales revenue within the consolidated statements of operations and comprehensive income. Future cash flows received from sales-type leases are bifurcated between principal repayment of the long-term receivable and the related imputed interest income related to the customer financing. The interest income is recorded as financing revenue within the consolidated statements of operations and comprehensive income. Contract Costs Contract costs includes contract acquisition costs and contract fulfillment costs, which are all recorded within other assets in the consolidated balance sheets. Contract Acquisition Costs. Prior to January 1, 2019, the Company accounted for initial direct costs incurred by the Company to originate leases as deferred lease costs. The costs capitalized were directly related to the negotiation and execution of leases and primarily consisted of internal compensation and benefits as lease origination activities were performed internally by the Company. Deferred lease costs capitalized prior to the adoption of the authoritative guidance on leases will be amortized on a straight-line basis over the remaining lease term. For all leases originated on or after January 1, 2019, subsequent to the adoption of authoritative guidance on leases, the incremental costs incurred by the Company to originate contracts with customers are capitalized as contract acquisition costs. Contract acquisition costs, which generally include commissions and other costs that are only incurred as a result of obtaining a contract, are capitalized when the incremental costs are expected to be recovered over the contract period. All other costs incurred regardless of obtaining a contract are expensed as incurred. Contract acquisition costs are amortized over the period the costs are expected to contribute directly or indirectly to future cash flows, which is generally over the contract term, on a basis consistent with the transfer of goods or services to the customer to which the costs relate. Contract acquisition costs, net as of March 31, 2019 and December 31, 2018 were $3.9 million and $3.7 million, respectively, and were recorded in other assets in the consolidated balance sheets. Contract Fulfillment Costs. Costs incurred by the Company to fulfill a contract with a customer and are capitalized when the costs generate or enhance resources that will be used in satisfying future performance obligations of the contract and the costs are expected to be recovered. Capitalized contract fulfillment costs generally include contracted services, direct labor, materials, and allocable overhead directly related to resources required to fulfill the contract, including shipping and installation activities. Contract fulfillment costs are amortized over the period the costs are expected to contribute directly or indirectly to future cash flows, which is generally over the contract term, on a basis consistent with the transfer of good or services to the customer to which the costs relate. Contract fulfillment costs, net as of March 31, 2019 and December 31, 2018 were $2.8 million and $1.5 million, respectively, and were recorded in other assets in the consolidated balance sheets. Total contract costs amortization expense for the three months ended March 31, 2019 and March 31, 2018 were $0.9 million and $0.6 million respectively. Contract costs are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company had no impairment charges related to contract costs during the three months ended March 31, 2019. Adoption of New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board, or FASB, issued authoritative guidance regarding leases that requires lessees to recognize a lease liability and right‑of‑use asset for operating leases, with the exception of short‑term leases. In addition, lessor accounting was modified to align, where necessary, with lessee accounting modifications and the authoritative guidance regarding revenue from contracts with customers. During 2018, the FASB issued additional authoritative guidance which, among other things, provided an option to apply transition provisions under the standard at adoption date rather than the earliest comparative period presented as well as added a practical expedient that would permit lessors to not separate non-lease components from the associated lease components if certain conditions are met. These amendments are effective, in conjunction with the new lease standard, for annual reporting periods beginning on or after December 15, 2018, including interim periods within those annual periods. The Company adopted this guidance on a modified retrospective basis on January 1, 2019 with the cumulative effect of the transition as of the date of adoption. The Company has elected the package of practical expedients provided for within the authoritative guidance which exempts the Company from having to reassess: (i) whether expired or existing contracts contain leases, (ii) the lease classification for expired or existing leases, and (iii) initial direct costs for existing leases. In addition, the Company has elected the practical expedient that permits lessors to not separate non-lease components from the associated lease components if certain conditions are met. Lastly, the Company has utilized the short-term exemption for lessees and established an accounting policy to not recognize a right-of-use asset or lease liability for any lease with a term of less than 12 months. The Company did not elect to utilize any of the other practical expedients. The impacts of the new lease standard are as follows: Lessee accounting - The adoption has had a material impact on the consolidated balance sheets, including an increase to both assets and liabilities, as a result of the recognition of a right-of-use asset and corresponding lease liability for operating leases. As the Company has made a policy election for the |
Business Combinations and Asset
Business Combinations and Asset Acquisitions | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations and Asset Acquisitions | |
Business Combinations and Asset Acquisitions | 3. Business Combinations and Asset Acquisitions Business Combinations Pure Health Solutions, Inc. On December 18, 2018, Quench USA, Inc. (“Quench”), a wholly-owned subsidiary of AquaVenture Holdings Limited, acquired all of the issued and outstanding shares of Pure Health Solutions, Inc. (“PHSI”) pursuant to a stock purchase agreement (the “PHSI Acquisition”). PHSI, which is based outside of Chicago, is a leading provider of filtered water coolers and related services through direct and indirect sales channels. The Company paid approximately $57.0 million, in the aggregate, which included approximately $39.5 million of cash related to the purchase price of PHSI, net of an estimated adjustment to reduce the purchase price of $1.2 million, and approximately $17.5 million of cash accounted for as a post-combination payoff of factored contract liabilities which had been accounted for as a secured borrowing. The factored contract liabilities were adjusted to fair value as of the acquisition date based on the present value of the factored contract liabilities using a discount rate of approximately 7% and any penalties associated with the payoff, which were accounted for as a post-combination transaction. Related transaction costs incurred by the Company during the three months ended March 31, 2019 were $0.1 million, which were expensed as incurred within selling, general and administrative (“SG&A”) expenses in the consolidated statements of operations and comprehensive income. The Quench business completed the PHSI Acquisition to expand its installed base of POU systems and to be able to participate more broadly in the global POU market through the PHSI distribution network. In addition, the PHSI Acquisition enhances Quench’s ability to develop, source and manufacture exclusive coolers and purification offerings. Lastly, it offers us the opportunity to develop relationships with POU dealers that could lead to future acquisitions. The following table summarizes the preliminary purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination and liabilities assumed (in thousands): Assets acquired: Cash and cash equivalents $ 260 Trade receivables 1,167 Inventory 2,606 Prepaid expenses and other current assets 447 Property, plant and equipment 6,410 Deferred tax asset 108 Identified intangible assets 31,550 Goodwill 20,374 Total assets acquired 62,922 Liabilities assumed: Accounts payable and accrued liabilities (22,652) Deferred revenue (329) Other long-term liabilities (450) Total liabilities assumed (23,431) Total purchase price $ 39,491 As of March 31, 2019, the purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed remains preliminary. The preliminary purchase price allocation has been developed based on estimates of fair values using the historical financial statements of PHSI prior to the acquisition along with assumptions made by management. Although the Company does not expect the final allocation to vary significantly, there may be adjustments made to the preliminary purchase price allocation that could result in changes to the preliminary fair values allocated, assigned useful lives and associated amortization recorded. The assets and liabilities in the preliminary purchase price allocation are stated at fair value based on estimates of fair value using available information and making assumptions management believes are reasonable. Intangibles identified and valued related to the transaction include customer relationships, trade names and non-compete agreements. The final valuation of the intangibles identified is dependent upon certain valuation and other studies that have not yet been finalized. Accordingly, the preliminary purchase price allocation is subject to further adjustment as additional information becomes available and as additional analyses and final valuations are completed. There can be no assurances that these additional analyses and final valuations will not result in material changes to the estimates of fair value set forth above . The estimated weighted average useful life for customer relationships, trade names, and non-compete agreements is 20 years, 12 years, and 5 years, respectively. Goodwill is composed of the acquired workforce and synergies not valued and is not deductible for tax purposes. Goodwill for the PHSI Acquisition is recorded within the Quench reportable segment. The results of the operations of the acquired PHSI assets are included in the Quench reportable segment after the date of the PHSI Acquisition. The Company identified certain liabilities, including tax matters that existed prior to December 18, 2018. The Company believes the liabilities are indemnified pursuant to the stock purchase agreement for the PHSI Acquisition. As a result, the Company recorded a liability in the amount of $0.8 million which was recorded in accrued liabilities and an indemnification receivable in the amount of $0.8 million, which was recorded in prepaids and other current assets in the consolidated balance sheet as of March 31, 2019. Commencing on December 18, 2018, the Company initiated a restructuring of the PHSI organization which included the reduction of headcount for PHSI executive management and other employee positions determined to be duplicative with those at Quench. Certain of the positions were backfilled with additional positions at Quench depending on the needs of the business. The net effect of the restructuring will allow Quench to recognize synergies of reduced employee costs subsequent to the PHSI Acquisition. The restructuring was determined to be a post-combination transaction. During the three months ended March 31, 2019, the Company incurred an incremental restructuring-related charge related to severance, termination benefits and related taxes of $0.1 million which was recorded within SG&A expenses in the consolidated statements of operations and comprehensive income. As of March 31, 2019 and December 31, 2018, the Company had accrued approximately $0.5 million and $0.8 million, respectively, within accrued liabilities on the consolidated balance sheets. Remaining severance payments are expected to be made during 2019. The Company expects to incur an additional charge of $0.1 million during the second quarter of 2019. FB Global Development, Inc., d/b/a Bluline On December 3, 2018, Quench acquired substantially all the assets and assumed certain liabilities of FB Global Development, Inc., d/b/a Bluline (“Bluline”) pursuant to an asset purchase agreement (the “Bluline Acquisition”). Bluline, based in South Florida, is a provider of filtered water coolers and related services through direct and indirect sales channels. The aggregate purchase price, subject to working capital adjustments, of the Bluline Acquisition was $2.5 million in cash and $0.3 million payable which is expected to be paid in full by December 2019. There were no related transaction costs incurred by the Company during the three months ended March 31, 2019. The Quench business completed the Bluline Acquisition to expand its installed base of POU systems and to be able to participate more broadly in the global POU market through its indirect sales channel. The following table summarizes the preliminary purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed (in thousands): Assets acquired: Trade receivables $ 90 Inventory 345 Property, plant and equipment 331 Identified intangibles 1,462 Goodwill 645 Total assets acquired 2,873 Liabilities assumed: Deferred revenue (10) Total liabilities assumed (10) Total purchase price $ 2,863 As of March 31, 2019, the purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the Bluline Acquisition, and liabilities assumed remains preliminary. The preliminary purchase price allocation has been developed based on estimates of fair values using the historical financial statements of Bluline prior to the acquisition along with assumptions made by management. Although the Company does not expect the final allocation to vary significantly, there may be adjustments made to the preliminary purchase price allocation that could result in changes to the preliminary fair values allocated, assigned useful lives and associated amortization recorded. The assets and liabilities in the preliminary purchase price allocation are stated at fair value based on estimates of fair value using available information and making assumptions management believes are reasonable. Intangibles identified and valued related to the transaction include customer relationships and non-compete agreements. The Company determined the weighted average useful life at the date of valuation for the customer relationships and non-compete agreements to be 20 years and 5 years, respectively. Goodwill for this acquisition is composed of synergies not valued, is deductible for tax purposes and is recorded within the Quench reportable segment. The results of the operations of the acquired Bluline assets are included in the Quench reportable segment from and after the date of acquisition. AUC Acquisition Holdings On November 1, 2018, AquaVenture Holdings Inc., a wholly owned subsidiary of AquaVenture, acquired all of the issued and outstanding membership interests of AUC Acquisition Holdings (“AUC”), a provider of wastewater treatment and water reuse solutions based in Houston, Texas, pursuant to a membership interest purchase agreement (the “AUC Acquisition”). Related transaction costs incurred by the Company during the three months ended March 31, 2019 were $0.1 million, which were expensed as incurred within SG&A expenses in the consolidated statements of operations and comprehensive income. The Company completed the AUC Acquisition to expand its WAAS offerings in the wastewater treatment and water reuse businesses and broaden the Company’s existing portfolio in the United States. The following table summarizes the preliminary purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed (in thousands): Assets acquired: Cash and cash equivalents $ 849 Trade receivables 1,763 Inventory 2,642 Current portion of long-term receivables 521 Prepaid expenses and other current assets 1,673 Property, plant and equipment 32,266 Other assets 25 Long-term receivables 306 Identified intangible assets 47,310 Goodwill 63,041 Total assets acquired 150,396 Liabilities assumed: Accounts payable and accrued liabilities (4,286) Deferred revenue (1,021) Other long-term liabilities (1,706) Deferred tax liability (12,483) Total liabilities assumed (19,496) Total purchase price $ 130,900 During the first quarter of 2019, the Company updated its allocation of the purchase price to the assets acquired and liabilities assumed. Intangibles identified and valued related to the transaction include customer relationships, trade names, non-compete agreements and backlog. The final valuation of the intangibles identified is dependent upon certain valuation and other studies that have not yet been finalized. Accordingly, the preliminary purchase price allocation is subject to further adjustment as additional information becomes available and as additional analyses and final valuations are completed. There can be no assurances that these additional analyses and final valuations will not result in material changes to the estimates of fair value set forth above . The estimated fair value of the customer relationships was determined using the multi-period excess earnings method which is based on the present value of expected cash flows generated by the revenues under the contract with the customer. The estimated fair value of the trade names was determined using the relief from royalty method which is based on the present value of royalty fees derived from projected revenues. The estimated fair value of the non-compete agreements was determined using the comparative business valuation method which is based on the present value of potential revenue and cash flow loss. The estimated fair value of the backlog, which represents revenues and the related profit for contracts executed but not yet completed, was determined using the multi-period excess earnings method. The Company determined the weighted average useful life at the date of valuation for the customer relationships, trade names, non-compete agreements and backlogs is 20 years, 15 years, 4.9 years, and 0.7 years, respectively. There was not a material impact on the amortization expense recorded during the three months ended March 31, 2019 as a result of the measurement period adjustments made to the purchase price allocation during the three months ended March 31, 2019. Goodwill is composed of the acquired workforce and synergies not valued and is not deductible for tax purposes. Goodwill for the AUC Acquisition is recorded within the Seven Seas Water reportable segment. The results of the operations of the acquired AUC assets are included in the Seven Seas Water reportable segment after the date of acquisition. Alpine Water Systems, LLC On August 6, 2018, Quench acquired substantially all the assets and assumed certain liabilities of Alpine Water Systems, LLC (“Alpine”), a POU water filtration company based in Las Vegas, Nevada, pursuant to an asset purchase agreement (the “Alpine Acquisition”). The aggregate purchase price of the Alpine Acquisition was $15.0 million, including $14.5 million in cash (including final working capital adjustment of $0.1 million which was received during the three months ended March 31, 2019), $0.4 million payable on August 6, 2020, and $0.1 million of acquisition contingent consideration. The acquisition contingent consideration is recorded at its estimated fair value with the ultimate payout based upon the future performance of the acquired assets. The undiscounted range of outcomes for the acquisition contingent consideration is $0 to $0.3 million. In addition, the asset purchase agreement includes contingent payments with the ultimate payout based upon the future performance of the acquired assets. The contingent payments are automatically forfeited if the employment of certain selling shareholders terminates. The Company has determined that the contingent payments will be post combination compensation expense, which will be accreted to their estimated payout amount of $0.4 million throughout the substantive service period. The undiscounted range of outcomes for the post combination compensation payout amount is $0 to $1.1 million. The assets acquired consist primarily of in-place lease agreements and the related POU systems in the United States and Canada. Related transaction costs incurred by the Company during the three months ended March 31, 2019 were $0.2 million, which were expensed as incurred within SG&A expenses in the consolidated statements of operations and comprehensive income. The Quench business completed the asset acquisition to expand its installed base of POU systems. The following table summarizes the purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed (in thousands), subject to measurement period adjustments: Assets acquired: Trade receivables $ 556 Inventory 141 Prepaid expenses and other current assets 153 Property, plant and equipment 1,562 Customer relationships 6,280 Non-compete agreements 1,149 Goodwill 6,006 Total assets acquired 15,847 Liabilities assumed: Accounts payable and accrued liabilities (295) Deferred revenue (565) Total liabilities assumed (860) Total purchase price $ 14,987 As of March 31, 2019, the purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed remains subject to measurement period adjustments. During the first quarter of 2019, the Company updated its allocation of the purchase price to the assets acquired and liabilities assumed. The assets and liabilities in the purchase price allocation are stated at fair value based on estimates of fair value using available information and making assumptions management believes are reasonable. Intangibles identified and valued related to the transaction include customer relationships and non-compete agreements. The fair value of the customer relationships was determined using the multi-period excess earnings method which is based on the present value of expected cash flows generated by the revenues under the contract with the customer using a discount rate of 13.4%. The fair value of the non-compete agreements was determined using the comparative business valuation method which is based on the present value of potential revenue loss using a discount rate of 13.4%. The Company determined the weighted average useful life at the date of valuation for the customer relationships and non-compete agreements to be 15 years and 5 years, respectively. There was not a material impact on the amortization expense recorded during the three months ended March 31, 2019 as a result of the measurement period adjustments made to the purchase price allocation during the three months ended March 31, 2019. Goodwill is composed of synergies not valued, is deductible for tax purposes and is recorded within the Quench reportable segment. The results of the operations of the acquired Alpine assets are included in the Quench reportable segment from and after the date of acquisition. Wa-2 Water Company Ltd. On March 1, 2018, Quench Canada, Inc., a wholly-owned subsidiary of the Company, acquired substantially all of the water filtration assets and assumed certain liabilities of Wa-2 Water Company Ltd. (“Wa-2”), pursuant to an asset purchase agreement for an aggregate purchase price of $5.1 million in cash, including a final working capital adjustment of approximately $5 thousand which was paid in June 2018 (the “Wa-2 Acquisition”). Approximately $0.3 million of the aggregate purchase price, subject to adjustment, was held in escrow for a period of one year by a third party for seller indemnifications. Wa-2 is a POU water filtration company based in Vancouver, British Columbia. The assets acquired consist primarily of in-place lease agreements and the related POU systems. Related transaction costs incurred by the Company during the three months ended March 31, 2018 were $0.1 million. There were no related transaction costs incurred by the Company during the three months ended March 31, 2019. The Quench business completed the Wa-2 Acquisition to expand its installed base of POU systems in Canada. The following table summarizes the purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed (in thousands): Assets acquired: Trade receivables $ 134 Inventory 158 Prepaid expenses and other current assets 6 Property, plant and equipment 424 Customer relationships 1,561 Trade names 700 Non-compete agreements 298 Goodwill 2,239 Total assets acquired 5,520 Liabilities assumed: Accounts payable and accrued liabilities (86) Deferred revenue (328) Total liabilities assumed (414) Total purchase price $ 5,106 As of March 31, 2019, the purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed is considered final. During the second quarter of 2018, the Company updated its allocation of the purchase price to the assets acquired and liabilities assumed. The assets and liabilities in the purchase price allocation are stated at fair value based on estimates of fair value using available information and making assumptions management believes are reasonable. Intangibles identified and valued related to the transaction include customer relationships, trade names and non-compete agreements. The fair value of the customer relationships was determined using the multi-period excess earnings method which is based on the present value of expected cash flows generated by the revenues under the contract with the customer using a discount rate of 12.9%. The fair value of the trade names was determined using the relief from royalty method which is based on the present value of royalty fees derived from projected revenues using a discount rate of 12.9%. The fair value of the non-compete agreements was determined using the comparative business valuation method which is based on the present value of potential revenue and cash flow loss using a discount rate of 12.9%. The Company determined the weighted average useful life at the date of valuation for the customer relationships, trade names and non-compete agreements to be 20 years, 12 years, and 5 years, respectively. There was not a material impact on the amortization expense recorded during the three months ended March 31, 2019 as a result of the measurement period adjustments made to the purchase price allocation during 2018. Goodwill is composed of synergies not valued, is deductible for tax purposes and is recorded within the Quench reporting segment. The results of the operations of the acquired Wa-2 assets are included in the Quench reportable segment from and after the date of acquisition. Pro Forma Financial Information The following unaudited pro forma financial information (in thousands, except for per share amounts) for the Company gives effect to the acquisitions of: (i) PHSI, which occurred on December 18, 2018; (ii) Bluline, which occurred on December 3, 2018; (iii) AUC, which occurred on November 1, 2018; (iv) Alpine, which occurred on August 6, 2018; and (v) Wa-2, which occurred on March 1, 2018, as if each had occurred on January 1, 2018. These unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisitions occurred on the date indicated, or that may result in the future. Three months ended March 31, 2019 2018 Revenues $ 46,562 $ 44,410 Net loss $ (5,664) $ (10,005) Loss per share $ (0.21) $ (0.38) |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue | |
Revenues | 4. Revenue Disaggregation of Revenue The following table represents a disaggregation of revenue for the three months ended March 31, 2019 and 2018, along with the reportable segment for each category (in thousands): Three Months Ended March 31, 2019 Seven Seas Water Quench Total Bulk water Water delivery $ 8,713 $ — $ 8,713 Operating and maintenance 5,597 — 5,597 Total bulk water 14,310 — 14,310 Rental Lease of equipment 3,139 18,668 21,807 Total rental 3,139 18,668 21,807 Financing 972 — 972 Product sales Construction of plants 1,696 — 1,696 Sale of equipment, coffee and consumables — 7,777 7,777 Total product sales 1,696 7,777 9,473 Total revenues $ 20,117 $ 26,445 $ 46,562 Three Months Ended March 31, 2018 Seven Seas Water Quench Total Bulk water Water delivery $ 8,439 $ — $ 8,439 Operating and maintenance 5,257 — 5,257 Total bulk water 13,696 — 13,696 Rental Lease of equipment — 13,959 13,959 Total rental — 13,959 13,959 Financing 1,048 — 1,048 Product sales Construction of plants — — — Sale of equipment, coffee and consumables — 3,811 3,811 Total product sales — 3,811 3,811 Total revenues $ 14,744 $ 17,770 $ 32,514 Contract Assets and Liabilities Contract assets include amounts related to our contractual right to consideration for completed performance obligations not yet invoiced. Contract liabilities include payments received in advance of performance under the contract or for differences between the amount billed to a customer and the revenue recognized for the completed performance obligation. The following table provides information about contract assets and contract liabilities from contracts with customers at March 31, 2019 and December 31, 2018 (in thousands): March 31, December 31, 2019 2018 Contract assets Trade receivables, net $ 22,578 $ 21,437 Current portion of long-term receivables 7,099 6,538 Long-term receivables 38,250 40,574 Total contract assets $ 67,927 $ 68,549 Contract liabilities Deferred revenue, current $ 4,298 $ 3,890 Deferred revenue, non-current 10,741 10,690 Total contract liabilities $ 15,039 $ 14,580 Significant changes in the contract asset and the contract liability balances during the period are as follows (in thousands): Three months ended Three months ended March 31, 2019 March 31, 2018 Contract assets Contract liabilities Contract assets Contract liabilities Revenue recognized that was included in the contract liability balance at January 1, 2018 $ — $ 4,197 $ — $ 2,733 Deferred revenue acquired during the period $ — $ — $ — $ (356) The Company had no asset impairment charges related to contract assets during the three months ended March 31, 2019 and March 31, 2018. Transaction Price Allocated to Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands). The estimated revenue does not include amounts of variable consideration, including revenues based on changes to consumer price indices that are constrained. In addition, the estimated revenue is based on current contracts with customers and does not take into consideration contract terms not legally enforceable with the customer. Remainder of 2019 $ 48,184 2020 $ 47,250 2021 $ 47,098 2022 $ 45,297 2023 $ 45,297 Thereafter $ 314,342 The amounts presented in the table above primarily consist of bulk water sales and service, service concession arrangements and construction revenues for certain product sales contracts. The amounts presented in the table above do not include the rental of equipment accounted for as operating leases as these are included within the disclosure in Note 6—Leases. The transaction price for bulk water sales and service and service concession arrangements are based on contractual minimum monthly charges and the expected amount of variable consideration related to the amount of water in excess of contractual minimum volumes, if applicable, or the amount of water expected to be supplied and the contractual rates. The remaining performance obligations to be performed generally include the delivery of bulk water or performance of O&M services with revenues being recognized as the remaining performance obligations are delivered to the customer. The transaction price for the construction revenues are based on the contractual price with the customer. The remaining performance obligations to be performed generally include the completed construction of the infrastructure. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | 5. Fair Value Measurements At March 31, 2019 and December 31, 2018, the Company had the following assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets: · U.S. Treasury securities are measured on a recurring basis and are recorded at fair value based on quoted market value in an active market, which is considered a Level 1 input. · Money market funds are measured on a recurring basis and are recorded at fair value based on each fund’s quoted market value per share in an active market, which is considered a Level 1 input. · Acquisition contingent consideration is measured on a recurring basis and is recorded at fair value based on a probability‑weighted discounted cash flow model which utilizes unobservable inputs such as the forecasted achievement of performance targets throughout the earn‑out period, which is considered a Level 3 input. There were no transfers into or out of Level 1, 2 or 3 assets during the three months ended March 31, 2019. Transfers between levels are deemed to have occurred if the lowest level of input were to change. The Company’s fair value measurements as of March 31, 2019 and December 31, 2018 were as follows (in thousands): Quoted Prices in Significant Active Markets Other Significant Asset/ for Identical Observable Unobservable Assets/Liabilities Measured at Fair Value (Liability) Assets (Level 1) Inputs (Level 2) Inputs (Level 3) As of March 31, 2019 Recurring basis: Money market funds $ 4,089 $ 4,089 $ — $ — U.S. Treasury securities $ 30,080 $ 30,080 $ — $ — Acquisition contingent consideration $ 2,486 $ — $ — $ 2,486 As of December 31, 2018 Recurring basis: Money market funds $ 42,135 $ 42,135 $ — $ — Acquisition contingent consideration $ 3,109 $ — $ — $ 3,109 See Note 9—“Commitments and Contingencies” for changes in the estimated fair value and additional information on the acquisition contingent consideration. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Leases | 6. Leases Lessee accounting The Company leases space and operating assets, including offices, office equipment, warehouses, storage yards and storage units under non-cancelable operating leases expiring at various dates with some containing escalation in rent clauses, rent concessions and/or renewal options. Minimum lease payments under operating leases are recognized on a straight-line basis over the term of the lease, including any periods of free rent. The components of lease cost were as follows (in thousands): Three Months Ended March 31, 2019 Lease Cost Operating lease cost $ 717 Short-term lease cost 118 Variable lease cost 4 Total lease cost $ 839 The weighted-average remaining lease term and weighted-average discount rate for operating leases as of March 31, 2019 is 8.0 years and 9.9%, respectively. Cash paid for operating leases that are included in the measurement of lease liabilities during the three months ended March 31, 2019 was $0.5 million. As of March 31, 2019, the maturities of the Company’s operating lease liabilities were as follows (in thousands): Remainder of 2019 $ 1,668 2020 1,684 2021 1,672 2022 1,561 2023 1,172 Thereafter 5,657 Total future minimum lease payments 13,414 Less imputed lease interest (4,508) Total lease liabilities $ 8,906 As of December 31, 2018, f uture minimum lease payments under non‑cancelable operating leases are summarized as follows (in thousands): 2019 $ 2,097 2020 905 2021 990 2022 856 2023 773 Thereafter 5,117 Total future minimum lease payments $ 10,738 Lessor accounting The components of lease income were as follows (in thousands): Three Months Ended March 31, 2019 Lease income: sales-type leases Profit at lease commencement $ - Interest income on lease receivables 788 Total lease income: sales-type leases 788 Lease income: operating leases 21,807 Total lease income $ 22,595 Future minimum rental revenues to be generated from the leased assets under non-cancelable operating leases are summarized as follows (in thousands): Remainder of 2019 $ 43,949 2020 $ 39,370 2021 $ 25,633 2022 $ 16,192 2023 $ 11,737 Thereafter $ 2,931 Included in long-term receivables, current and long-term receivables in the consolidated balance sheets are sales-type lease receivables for the Company’s sales-type leases. As of March 31, 2019, the maturities of the Company’s sales-type lease receivables are as follows (in thousands): Remainder of 2019 $ 603 2020 761 2021 600 2022 473 2023 409 Thereafter — Total future minimum lease payments 2,846 Less imputed lease interest (443) Total sales-type lease receivables $ 2,403 |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation | |
Share-Based Compensation | 7. Share‑Based Compensation AquaVenture Equity Awards The AquaVenture Holdings Limited 2016 Share Option and Incentive Plan (the “2016 Plan”) allows for the issuance of incentive share options, non-qualified share options, share appreciation rights, restricted share units, restricted share awards, unrestricted share awards, cash-based awards, performance share awards and dividend equivalent rights to officers, employees, managers, directors and other key persons, including consultants to the Company. The aggregate number of ordinary shares initially authorized for issuance, subject to adjustment upon a change in capitalization, under the 2016 Plan was 5.0 million shares. The shares authorized for issuance increase annually by 4% of the number of ordinary shares issued and outstanding on the immediately preceding December 31. As of March 31, 2019, the number of ordinary shares authorized for issuance under the 2016 Plan was 8.2 million shares. During the three months ended March 31, 2019, the Company granted an aggregate of 0.4 million restricted share units to employees, non-employee consultants and certain members of the Company’s board of directors. Restricted share units granted to employees and non-employee consultants had a time-based vesting schedule with 25% vesting on the first anniversary of the date of grant and the remaining 75% vesting quarterly over the remaining three years. Restricted share units granted to certain members of the Company’s board of directors vest in full on the first anniversary of the date of the grant. The aggregate grant date fair value of restricted share units granted during the three months ended March 31, 2019 was approximately $7.6 million. Employee Stock Purchase Plan Under the 2016 Employee Stock Purchase Plan (“2016 ESPP”), the Company offers eligible employee participants the right to purchase the Company’s ordinary shares at a price equal to the lesser of 85 percent of the closing market price on the first or last day of an established offering period. Based on the timing of the offering period, there were no shares sold to eligible employees under the 2016 ESPP during the three months ended March 31, 2019 . Share-based compensation expense is recognized based on the fair value of the employees’ purchase rights under the 2016 ESPP and is amortized on a straight-line basis over the offering period. As of March 31, 2019, the number of ordinary shares authorized for issuance under the 2016 ESPP was 0.9 million. Independent Directors’ Deferred Compensation Program Under the Independent Directors' Deferred Compensation Program (the “Deferred Compensation Program”), eligible members of the Company’s board of directors (“Eligible Directors”) are able to defer all or a portion of the cash compensation or equity awards which they are due in the form of phantom share units. Each phantom share unit is the economic equivalent of one ordinary share of the Company. The number of phantom share units credited to the Eligible Director’s deferred account is equal to 120% of the aggregate deferred cash fees that would otherwise be payable on such date divided by the closing price of the Company’s ordinary shares on the award date. No premium is given to the directors for deferral of their equity awards. Phantom share units are settled in ordinary shares upon the earlier of the Eligible Director’s death, disability, separation from the board, sale event, or end of the first full fiscal year after the grant date. The phantom share units issued in lieu of the cash retainers have no vesting period and cannot be forfeited. The phantom share units issued in lieu of the restricted units have a stated vesting period but will then have a deferred delivery once vested. Share-based compensation expense for the phantom share units issued in lieu of the cash retainers is recognized on the date of grant, while share-based compensation expense for the phantom share units issued in lieu of the restricted units is recognized over the requisite service period, which is typically 12 months. During the three months ended March 31, 2019, the Company granted approximately 19 thousand phantom shares to Eligible Directors, including 17 thousand phantom shares which vest in full on the first anniversary of the date of the grant and 2 thousand phantom shares that are immediately vested. The aggregate grant date fair value of the awards granted during the three months ended March 31, 2019 was $0.4 million. During the three months ended March 31, 2019, approximately 9 thousand phantom share units were forfeited pursuant to the terms in the Deferred Compensation Program. During the three months ended March 31, 2019, approximately 4 thousand phantom share units were converted to 4 thousand ordinary shares of the Company pursuant to the terms in the Deferred Compensation Program. At March 31, 2019, approximately 53 thousand phantom shares remained outstanding. Share‑Based Compensation Expense Total share‑based compensation expense recognized for all equity awards during the three months ended March 31, 2019 and 2018 was $1.0 million and $3.3 million, respectively. For the three months ended March 31, 2019, $0.9 million and $0.1 million were recorded in SG&A and cost of revenues, respectively, within the consolidated statements of operations and comprehensive income. For the three months ended March 31, 2018, $3.2 million and $0.1 million were recorded in SG&A and cost of revenues, respectively, within the consolidated statements of operations and comprehensive income. There was no related tax benefit for the three months ended March 31, 2019 and 2018. |
Loss per Share
Loss per Share | 3 Months Ended |
Mar. 31, 2019 | |
Loss per Share | |
Loss per Share | 8. Loss per Share Basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to ordinary shareholders for the period by the weighted-average number of ordinary shares outstanding during the same period. Basic weighted-average shares outstanding excludes unvested shares of restricted share awards, restricted share units and phantom share units. Diluted earnings (loss) per share is computed by dividing net earnings (loss) attributable to ordinary shareholders for the period by the weighted-average number of ordinary shares outstanding adjusted to give effect to potentially dilutive securities using the treasury stock method, except where the effect of including the effect of such securities would be anti-dilutive. The following table provides information for calculating net loss applicable to ordinary shareholders (in thousands, except per share amounts): Three Months Ended March 31, 2019 2018 Numerator: Net loss $ (5,664) $ (6,346) Denominator: Weighted-average ordinary shares outstanding - basic and diluted 26,865 26,491 Loss per share - basic and diluted $ (0.21) $ (0.24) Given that the Company had a net loss for the three months ended March 31, 2019 and 2018, the calculation of diluted loss per share is computed using basic weighted average ordinary shares outstanding. Approximately 4.2 million weighted-average outstanding share awards for the three months ended March 31, 2019 were excluded from the calculation of diluted earnings per share because their effect was antidilutive. Approximately 4.1 million weighted-average outstanding share awards for the three months ended March 31, 2018 were excluded from the calculation of diluted earnings per share because their effect was antidilutive. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure | |
Commitments and Contingencies | 9. Commitments and Contingencies Asset Retirement Obligations Asset retirement obligation (“ARO”) liabilities, which arise from contractual requirements to perform certain asset retirement activities and is generally recorded when the asset is constructed, are based on the Company’s engineering estimates of future costs to dismantle and remove equipment from a customer’s plant site and to restore the site to a specified condition at the conclusion of a contract. As appropriate, the Company revises certain of its liabilities based on changes in the projected costs for future removal and shipping activities. These revisions, along with accretion expense, are included in cost of revenues in the consolidated statements of operations and comprehensive income. During the three months ended March 31, 2019 and 2018, the Company recorded accretion expense of $13 thousand and $12 thousand, respectively. In addition, the Company performed certain asset retirement activities and recorded a valuation adjustment of $24 thousand during the three months ended March 31, 2019, which was recorded in cost of revenues in the consolidated statements of operations and comprehensive income. No valuation adjustments were recorded during the three months ended March 31, 2018. At March 31, 2019 and December 31, 2018, the current portion of the ARO liabilities was $0.6 and $0.7 million, respectively, which are recorded in accrued liabilities in the consolidated balance sheets. At March 31, 2019 and December 31, 2018, the long‑term portion of the ARO liabilities was $0.5 million and $0.5 million, respectively, which are recorded in other long‑term liabilities in the consolidated balance sheets. Acquisition Contingent Consideration Acquisition contingent consideration represents earnouts or additional purchase price that was derived in connection with certain acquisitions. A reconciliation of the beginning and ending amounts of the acquisition contingent consideration is as follows (in thousands): Three Months Ended March 31, 2019 Acquisition contingent consideration at beginning of the period $ 3,109 Payments (670) Valuation adjustments 9 Interest accretion 38 Acquisition contingent consideration at end of the period $ 2,486 A portion of the acquisition contingent consideration liabilities are contingent on the future collection of certain acquired receivables and are recorded at fair value based on collectability and a discount factor. The remaining acquisition contingent consideration liabilities are contingent on the future performance of the acquired business and are recorded at fair value based on a Monte Carlo Simulation which utilizes unobservable inputs, including forecasted revenues. The Company recorded interest accretion expense within the consolidated statements of operations and comprehensive income of $38 thousand and $0 for the three months ended March 31, 2019 and 2018, respectively. The Company also recorded valuation adjustments of $9 thousand for the change in fair value during the three months ended March 31, 2019, which was composed of (i) $64 thousand which was recorded in SG&A in the consolidated statements of operations and comprehensive income and (ii) $(55) thousand that was part of final purchase price allocation adjustments. At March 31, 2019 and December 31, 2018, $2.4 million and $2.7 million, respectively, were deemed current and were recorded in accrued liabilities in the consolidated balance sheets. At March 31, 2019 and December 31, 2018, $0.1 million and $0.4 million, respectively, were deemed long-term and were recorded in other long-term liabilities in the consolidated balance sheets. Litigation, Claims and Administrative Matters The Company, may, from time to time, be a party to legal proceedings, claims, and administrative matters that arise in the normal course of business. The Company has made accruals with respect to certain of these matters, where appropriate, that are reflected in the consolidated financial statements but are not, individually or in the aggregate, considered material. For other matters for which an accrual has not been made, the Company has not yet determined that a loss is probable or the amount of loss cannot be reasonably estimated. While the ultimate outcome of the matters cannot be determined, the Company currently does not expect that these proceedings and claims, individually or in the aggregate, will have a material effect on its consolidated financial position, results of operations, or cash flows. The outcome of any litigation is inherently uncertain, however, and if decided adversely to the Company, or if the Company determines that settlement of particular litigation is appropriate, the Company may be subject to liability that could have a material adverse effect on its consolidated financial position, results of operations, or cash flows. The Company maintains liability insurance in such amounts and with such coverage and deductibles as management believes is reasonable. The principal liability risks that the Company insures against are customer lawsuits caused by damage or nonperformance, workers’ compensation, personal injury, bodily injury, property damage, directors’ and officers’ liability, errors and omissions, employment practices liability and fidelity losses. There can be no assurance that the Company’s liability insurance will cover any or all events or that the limits of coverage will be sufficient to fully cover all liabilities. As of March 31, 2019, the Company determined there are no matters for which a material loss is reasonably possible or the Company has either determined that the range of loss is not reasonably estimable or that any reasonably estimable range of loss is not material to the consolidated financial statements. |
Cash Flow Information
Cash Flow Information | 3 Months Ended |
Mar. 31, 2019 | |
Cash Flow Information | |
Cash Flow Information | 10. Cash Flow Information Supplemental cash flow information is as follows (in thousands): Three Months Ended March 31, 2019 2018 Cash paid during the period: Income taxes, net $ 876 $ 746 Interest, net $ 6,282 $ 3,030 Non-Cash Transaction Information: Right-of-use assets obtained in exchange for new operating lease liabilities $ 175 — Non-cash capital expenditures $ 1,264 $ 184 The components of total ending cash for the periods presented in the consolidated statement of cash flows are as follows (in thousands): As of March 31, 2019 2018 Cash and cash equivalents $ 47,357 $ 109,950 Restricted cash, current — 2,000 Restricted cash, non-current 4,211 4,010 Cash, cash equivalents and restricted cash $ 51,568 $ 115,960 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting | |
Segment Reporting | 11. Segment Reporting The Company has two operating and reportable segments, Seven Seas Water and Quench. This determination is supported by, among other factors, the existence of individuals responsible for the operations of each segment and who also report directly to the Company’s chief operating decision maker (“CODM”), the nature of the segment’s operations and information presented to the Company’s CODM. Seven Seas Water provides outsourced desalination solutions and wastewater treatment and water reuse solutions for governmental, municipal (including utility districts), industrial, property developer and hospitality customers. Quench rents and sells bottleless filtered water coolers and other products that use filtered water as an input, such as ice machines, sparkling water dispensers and coffee brewers, to customers throughout the United States and Canada. In addition to the Seven Seas Water and Quench segments, the Company records certain general and administrative costs that are not allocated to either of the reportable segments within “Corporate and Other” for the CODM and for segment reporting purposes. These costs include, but are not limited to, professional service fees and other expenses to support the activities of the registrant holding company. Corporate and Other does not include any labor allocations from the Seven Seas Water and Quench segments. The Company believes this presentation more accurately portrays the results of the core operations of each of the operating and reportable segments to the CODM. The Corporate and Other administration function is not treated as a segment. As part of the segment reconciliation below, intercompany interest expense and the associated intercompany interest income are included but are eliminated in consolidation. The following table provides information by reportable segment and a reconciliation to the consolidated results for the three months ended March 31, 2019 and 2018 (in thousands): Three Months Ended March 31, 2019 Seven Seas Corporate Water Quench & Other Total Revenues: Bulk water $ 14,310 $ — $ — $ 14,310 Rental 3,139 18,668 — 21,807 Product sales 1,696 7,777 — 9,473 Financing 972 — — 972 Total revenues 20,117 26,445 — 46,562 Gross profit: Bulk water 7,728 — — 7,728 Rental 2,336 9,865 — 12,201 Product sales 293 3,121 — 3,414 Financing 972 — — 972 Total gross profit 11,329 12,986 — 24,315 Selling, general and administrative expenses 7,300 14,201 1,368 22,869 Income (loss) from operations 4,029 (1,215) (1,368) 1,446 Other expense, net (6,509) Loss before income tax expense (5,063) Income tax expense 601 Net loss $ (5,664) Other information: Depreciation and amortization $ 5,696 $ 6,262 $ — $ 11,958 Expenditures for long-lived assets $ 4,381 $ 2,796 $ — $ 7,177 Amortization of deferred financing fees $ 69 $ 51 $ 134 $ 254 Three Months Ended March 31, 2018 Seven Seas Corporate Water Quench & Other Total Revenues: Bulk water $ 13,696 $ — $ — $ 13,696 Rental — 13,959 — 13,959 Product sales — 3,811 — 3,811 Financing 1,048 — — 1,048 Total revenues 14,744 17,770 — 32,514 Gross profit: Bulk water 7,189 — — 7,189 Rental — 7,503 — 7,503 Product sales — 1,285 — 1,285 Financing 1,048 — — 1,048 Total gross profit 8,237 8,788 — 17,025 Selling, general and administrative expenses 7,603 10,719 1,252 19,574 Income (loss) from operations 634 (1,931) (1,252) (2,549) Other expense, net (3,390) Loss before income tax expense (5,939) Income tax expense 407 Net loss $ (6,346) Other information: Depreciation and amortization $ 3,564 $ 4,296 $ — $ 7,860 Expenditures for long-lived assets $ 515 $ 2,332 $ — $ 2,847 Amortization of deferred financing fees $ 66 $ 51 $ 122 $ 239 |
Significant Concentrations, Ris
Significant Concentrations, Risks and Uncertainties | 3 Months Ended |
Mar. 31, 2019 | |
Significant Concentrations, Risks and Uncertainties | |
Significant Concentrations, Risks and Uncertainties | 12. Significant Concentrations, Risks and Uncertainties The Company is exposed to interest rate risk resulting from its variable rate loans outstanding that adjust with movements in LIBOR. For the three months ended March 31, 2019, a significant portion of the Company’s revenues were derived from territories and countries in the Caribbean region. Demand for water in the Caribbean region is impacted by, among other things, levels of rainfall, natural disaster or other catastrophic events, the tourism industry and demand from our industrial clients. Destruction caused by tropical storms and hurricanes, high levels of rainfall, downturn in the level of tourism and demand for real estate could all adversely impact the future performance of the Company as well as cause delays in collections from the Company’s customers. At March 31, 2019, a significant portion of the Company’s property, plant and equipment is located in the Caribbean region. The Caribbean islands are situated in a geography where tropical storms and hurricanes occur with regularity, especially during certain times of the year. The Company designs its plant facilities to withstand such conditions; however, a major storm could result in plant damage or periods of reduced consumption or unavailability of electricity or source seawater needed to produce water in one or more of our locations. It is the Company’s policy to maintain adequate levels of property and casualty insurance; however, the Company only insures certain of its plants for wind damage. The operation of desalination plants requires significant amounts of electricity which typically is provided by the local utility of the jurisdiction in which the plant is located. A shortage of electricity supply caused by force majeure or material increases in electricity costs could adversely impact the Company’s operating results. To mitigate the risk of electricity cost increases, the Company has generally contracted with major customers for those cost increases to be borne by the customers and has invested in energy efficient technology. Management believes that rising energy costs and availability of its supply of electricity would not have a material adverse effect on its future performance. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as amended. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation of the Company’s unaudited condensed consolidated balance sheet as of March 31, 2019, the unaudited condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2019 and 2018, the unaudited condensed consolidated statements of changes in equity for the three months ended March 31, 2019 and 2018, and the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2019 and 2018. The unaudited condensed consolidated balance sheet as of December 31, 2018 was based on the audited consolidated balance sheet as of December 31, 2018, as presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as amended. The unaudited condensed consolidated financial statements include the accounts of AquaVenture Holdings Limited and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include: accounting for revenue from contracts with customers and the determination of transaction prices and allocation of revenues to remaining performance obligations; accounting for leases and the determination of operating lease liabilities and right-of-use assets; accounting for goodwill and identifiable intangible assets and any related impairment; property, plant and equipment and any related impairment; contract costs and any related impairment; share‑based compensation; allowance for doubtful accounts; obligations for asset retirement; acquisition contingent consideration; and valuation of deferred income taxes. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. |
Lessee accounting | Lessee accounting The Company leases space and operating assets, including offices, office equipment, warehouses, storage yards and storage units under non-cancelable operating leases. The Company accounts for these leases in accordance with the authoritative guidance adopted as of January 1, 2019. Please see “Adoption of New Accounting Pronouncements” section below for information regarding this adoption. At the time of contract inception, the Company determines if an arrangement is or contains a lease. If the arrangement contains a lease, the Company recognizes a right-of-use asset and an operating lease liability at the lease commencement date. Lease expense for lease payments made is recognized on a straight-line basis over the lease term. The operating lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date. The current portion of the Company’s operating lease liabilities are recorded within accrued liabilities in the consolidated balance sheets. The right-of-use asset is initially measured at cost, which is comprised of the initial amount of the operating lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. The right-of-use asset is subsequently measured throughout the lease term at the carrying amount of the operating lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Right-of-use assets are periodically reviewed for impairment whenever events or changes in circumstances arise. During the three months ended March 31, 2019, the Company had incurred no impairment charges related to right-of-use assets. Key estimates and judgments in determining both the operating lease liability and right-of-use asset include the determination of (i) the discount rate it uses to discount the unpaid lease payments to present value, (ii) the lease term and (iii) the lease payments. The discount rate applied to the unpaid lease payments is the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s deferred initial direct costs. Therefore, the Company generally derives an incremental borrowing rate as the discount rate for the lease. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease term for the Company’s leases includes the noncancelable period of the lease, plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Lease payments included in the measurement of operating lease liabilities are comprised of the following: · fixed payments; · variable lease payments that depend on an index or rate, initially measured using the index or rate at the lease commencement date; and · the exercise price of a Company option to purchase the underlying asset if the Company is reasonably certain to exercise the option. In certain instances, the Company's leases include non-lease components, such as equipment maintenance or common area maintenance. As part of its adoption of authoritative guidance on leases on January 1, 2019, the Company has not elected the practical expedient to account for the lease and non-lease components as a single lease component and has elected (for all classes of underlying assets) to account for these components separately. The Company allocates the consideration in the contract to the lease and non-lease components based on each component's relative standalone price. The Company determines standalone prices for the lease components based on the prices for which other lessors lease similar assets on a standalone basis. The Company determines standalone prices for the non-lease components based on the prices that suppliers might charge for those types of services on a standalone basis. If observable standalone prices are not readily available, the Company estimates the standalone prices maximizing the use of observable information. The Company has elected to utilize the short-term lease exemption and not recognize a right-of-use asset and corresponding operating lease liability for leases with expected terms of 12 months or less. The Company recognizes the lease payments associated with its short-term leases on a straight-line basis over the lease term. |
Lessor accounting | Lessor accounting The Company generates revenues through the lease of its bulk water facilities, wastewater treatment and water reuse equipment, and filtered water and related systems equipment to customers. In certain instances, the Company enters into a contract with a customer but must construct the underlying asset, including bulk water facilities and wastewater treatment and water reuse equipment, prior to its lease. At the time of contract inception, the Company determines if an arrangement is or contains a lease. Customer contracts that contain leases, which can be explicit or implicit in the contract, are generally classified as either operating leases or sales-type leases and can contain both lease and non-lease components, including operating and maintenance services (“O&M”) of the Company-owned equipment. As part of its adoption of authoritative guidance on leases on January 1, 2019, the Company elected the practical expedient for all classes of underlying assets to not separate the lease and non-lease components if certain conditions are met, including the classification of the lease component as operating and the revenue recognition pattern of both the lease and non-lease components. The Company will account for the contract with the customer as a combined component under the respective authoritative guidance for the predominant element in the contract, the lease or non-lease component. For leases classified as sales-type leases, the Company allocates the transaction price based on the relative standalone selling prices of the identified performance obligations. If the customer contract contains or is accounted for as a lease, the key estimates and judgments used by the Company in accounting for the lease as a lessor include the following: (i) lease term, (ii) the economic life of the underlying leased asset, (iii) determination of lease payments and (iv) determination of the fair value at the time of contract inception and the residual fair value of the underlying leased asset. The lease term for the Company’s leases includes the noncancelable period of the lease, plus any additional periods covered by either a lessee option to extend (or not to terminate) the lease that the lessee is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the Company. Contracts entered into with customers can include either the option to renew or an auto-renewing provision that results in the automatic extension of the existing contract. In certain instances, key provisions such as the lease payment or term of the renewal are not stated and are subject to negotiation. The economic life of the underlying leased asset is determined to be either the period over which the asset is expected to be economically usable, or where the benefits it can produce exceed the cost to replace or undertake major repairs. In certain instances, the economic life of the underlying leased asset can exceed the useful life assigned by the Company. Lease payments that are accounted for as rental revenue are comprised of the following: · fixed payments; · variable lease payments that depend on an index or rate, initially measured using the index or rate at the lease commencement date; · the exercise price of a lessee option to purchase the underlying asset if the lessee is reasonably certain to exercise the option; and · payments for penalties for the termination of a lease if the term reflects the lessee terminating the lease; and The Company’s leases do not typically include a requirement for the customer to guarantee the residual value of the underlying leased asset. Variable lease payments that do not depend on an index or rate are excluded from the determination of lease payments. The fair value of the underlying leased asset at contract inception and residual fair value of underlying leased asset at the end of the term of the lease are determined based on the price that would be received to sell an asset in an orderly transaction at the time of valuation. The Company’s risk management strategy for protecting the residual fair value of the underlying assets include the ongoing maintenance by the Company during the lease term as well as clauses and other protections within the lease agreements which require the lessee to return the underlying asset in working condition at the end of the lease term. At contract inception, the Company determines the lease classification of the underlying asset. The Company considers inputs such as the lease term, lease payments, fair value of the underlying asset and residual fair value of the underlying asset when assessing the classification. The discount rate applied to the unpaid lease payments is the interest rate implicit in the lease. The rate implicit in the lease is the rate of interest that, at a given date, causes the aggregate present value of (a) the lease payments and (b) the amount that the Company expects to derive from the underlying asset following the end of the lease term to equal the sum of (1) the fair value of the underlying asset minus any related investment tax credit retained and expected to be realized by the Company and (2) any deferred initial direct costs of the Company. In certain instances, contracts with customers may also include the option for the customer to purchase the underlying asset at the end of the lease term. When applicable and certain conditions are met, the Company will incorporate the stated purchase price into the determination of its implied interest rate. |
Revenue Recognition | Revenue Recognition Through the Seven Seas Water and Quench operating platforms, the Company generates revenues from the following primary sources: (i) bulk water sales and services; (ii) service concession arrangements; (iii) rental of equipment; and (iv) product sales. The revenue recognition policy for each of the primary sources of revenue are as follows: Bulk Water Sales and Services. Through the Seven Seas Water operating platform, the Company enters into contracts with customers with a single performance obligation to deliver bulk water or a series of performance obligations to perform substantially the same services with the same pattern of transfer, which can include the operations and maintenance (“O&M”) of a customer-owned or leased plant. The Company recognizes revenues from the delivery of bulk water or the performance of bulk water services at the time the water or services are delivered to the customers in accordance with the contractual agreements. Billings to the customer for both bulk water and the bulk water services are typically based on the volume of water supplied to a customer and typically contain a minimum monthly charge provision which allows the Company to invoice the customer for the greater of the water supplied or a minimum monthly charge. The volume of water supplied is based on meter readings performed at or near the end of the month. The transaction price calculated for bulk water sales and service can include, if applicable, contractual minimum monthly charges and the expected amount of variable consideration to the extent it is probable that a significant reversal of the cumulative revenue will not occur. The variable consideration generally includes the amount of water in excess of contractual minimum volumes, if applicable, or the amount of water expected to be supplied at contractually established rates. Estimates of revenue for unbilled water are recorded when meter readings occur at a time other than the end of a period. A contract asset or liability may be recognized in instances where there is a difference between the amount billed to a customer and the revenue recognized for the completed O&M performance obligations during the period. Revenues generated from both the delivery of bulk water and performance of services related to bulk water are recorded as bulk water revenue within the consolidated statements of operations and comprehensive income. Certain contracts with customers which require the construction of facilities to provide bulk water to a specific customer include two performance obligations, including an implicit lease for the bulk water facilities and bulk water services, and a non-lease component related to O&M services. The implicit lease performance obligation is generally accounted for as an operating lease as a result of the provisions of the contract. As the bulk water services are deemed to be the more predominant element, the Company considers the arrangement to be a combined bulk water component. The calculated transaction price can include, if applicable, contractual minimum monthly charges and the expected amount of variable consideration to the extent it is probable that a significant reversal of the cumulative revenues will not occur. The variable consideration generally includes the amount of water in excess of contractual minimum volumes, if applicable, or the amount of water expected to be supplied and contractually established rates. The revenue recognition pattern for both the lease and non-lease components are the same, with revenues being recognized ratably over the contract period as delivered to the customer. Revenues generated from both the lease and non-lease performance obligations are recorded as bulk water revenue within the consolidated statements of operations and comprehensive income. Service Concession Arrangements. Through the Seven Seas Water operating platform, the Company enters into contracts with customers that are determined to be service concession arrangements. Service concession arrangements are agreements entered into with a public sector entity which controls both (i) the ability to modify or approve the services and prices provided by the operating company and (ii) beneficial entitlement to, or residual interest in, the infrastructure at the end of the term of the agreement. Service concession arrangements typically include more than one performance obligation, including the construction of infrastructure for the customer and an obligation to provide O&M services for the infrastructure constructed for the customer. Billings to the customer for service concession arrangements are typically based on the volume of water supplied to a customer and typically contain a minimum monthly charge provision which allows the Company to invoice the customer for the greater of the water supplied or a minimum monthly charge. The volume of water supplied is based on meter readings performed at or near the end of the month. The transaction price calculated for service concession arrangements includes, if applicable, contractual minimum monthly charges and the expected amount of variable consideration to the extent it is probable that a significant reversal of the cumulative revenues will not occur. The variable consideration generally includes the amount of water in excess of contractual minimum volumes, if applicable, or the amount of water expected to be supplied at contractually established rates. The transaction price is allocated to the identified performance obligations based on the relative standalone selling prices of the identified performance obligations. The transaction price allocated to the construction of infrastructure performance obligation is recognized as product sales within the consolidated statements of operations and comprehensive income. Product sales are recognized over time, using the input method based on cost incurred, which typically begins at commencement of the construction with revenue being fully recognized upon the completion of the infrastructure as control of the infrastructure is, or is deemed to be, transferred to the customer. In addition, service concession contracts typically include a difference in timing of when control is, or is deemed to be, transferred and the collection of cash receipts, which are collected over the term of the entire arrangement. The timing difference could result in a significant financing component for the construction performance obligations if determined to be a material component of the transaction price. If a significant financing component is identified, the future cash flows included in the transaction price allocated to the construction performance obligations are discounted using a discount rate comparable to a market-based borrowing rate specific to both the customer and terms of the contract. The resulting present value of the allocated future cash flows is recorded as construction revenue with a related long-term receivable as control of the infrastructure is, or is deemed to be, transferred to the customer while the discount amount is considered to be the significant financing component. Future cash flows received from the customer related to the construction performance obligations are bifurcated between principal repayment of the long-term receivable and the related imputed interest income related to the customer financing. The interest income is recorded as financing revenue within the consolidated statements of operations and comprehensive income as providing financing to our customers is a core component of our business model. The transaction price allocated to the O&M performance obligation is recorded as bulk water revenue within the consolidated statements of operations and comprehensive income as the services are provided to the customer. A contract asset or liability may be recognized in instances where there is a difference between the amount billed to a customer and the revenue recognized for the completed O&M performance obligations during the period. Rental of Equipment. Through the Seven Seas Water and Quench operating platforms, the Company generates revenues through the rental of its wastewater treatment and water reuse equipment and filtered water and related systems to customers. Rental agreements classified as operating leases can contain both lease and non-lease components, including O&M services on Company-owned equipment. For rental agreements that meet all conditions of the elected practical expedient to not separate lease and non-lease components and where the lease component is determined to be the predominant element of the contract, the Company allocates all revenues under the contract to the lease component of the contract. Billings to the customer for the rental of this equipment, which generally occur either monthly or quarterly, are based on the rental rate as stated within the rental agreement. The transaction price is based on the minimum lease payment as stated within the rental agreement. Rental revenues, including revenues in connection with certain installation type activities are recognized ratably over the rental agreement term and amounts paid by customers in excess of recognizable revenue are recorded as a contract liability, or deferred revenue, in the consolidated balance sheets. Certain revenues associated with shipping, delivery, installation or similar activities that occur prior to lease commencement do not provide a service to the lessee and are not a non-lease component of the contract. Payments for these activities are recorded as prepaid lease payments which are recognized ratably with the rental revenue over the lease term. Upon the expiration of the initial rental agreement term, the Company may enter into rental agreement extensions in which revenues are recognized ratably over the extension term. Revenues generated under these rental agreements are recorded as rental revenue within the consolidated statements of operations and comprehensive income. Product Sales. Through both the Seven Seas Water and Quench operating platforms, the Company enters into contracts to construct desalination and wastewater treatment and water reuse equipment and facilities and to sell customers water and related filtration equipment, coffee and consumables, which may include contracts accounted for as sales-type leases. Contracts with customers to sell water and related filtration equipment and coffee and consumables typically include a single performance obligation. The Company recognizes revenues at the time the equipment, coffee or consumables is transferred to the customer, which can be upon either shipment or delivery to the customer. The transaction price is based on the contractual price with the customer. Shipping and handling costs paid by the customer are included in revenues. Billings to the customer for the sale of water and related filtration equipment, coffee and consumables occur at the time the product is transferred to the customer and are based on contract price. Contracts with customers to construct desalination and wastewater treatment and water reuse equipment and facilities typically include a single performance obligation. Construction and equipment revenues are recognized over time, using the input method based on cost incurred, which typically begins at the later of commencement of the construction or at the time the infrastructure is or is deemed to be transferred to the customer with revenue being fully recognized upon the completion of the infrastructure. Billings to the customer to construct desalination and wastewater treatment and water reuse equipment and facilities can occur at contractual intervals throughout the construction period, at the time the equipment or facility is deemed transferred to the customer, or, in the case of sales-type leases, as stated within the rental agreement. The transaction price is based on the contractual price with the customer. For contracts deemed to be, or that include a sales-type lease, the transaction price is based on the minimum lease payments as stated within the rental agreement. For contracts that contain both a lease and non-lease components, the transaction price is allocated based on the relative standalone selling prices of the lease and non-lease components. The transaction price, excluding variable lease payments, allocated to the lease component is discounted at the implicit rate of the contract and is recognized as revenue upon commencement of the lease. Revenues generated under these contracts are recorded as product sales revenue within the consolidated statements of operations and comprehensive income. Future cash flows received from sales-type leases are bifurcated between principal repayment of the long-term receivable and the related imputed interest income related to the customer financing. The interest income is recorded as financing revenue within the consolidated statements of operations and comprehensive income. |
Contract Costs | Contract Costs Contract costs includes contract acquisition costs and contract fulfillment costs, which are all recorded within other assets in the consolidated balance sheets. Contract Acquisition Costs. Prior to January 1, 2019, the Company accounted for initial direct costs incurred by the Company to originate leases as deferred lease costs. The costs capitalized were directly related to the negotiation and execution of leases and primarily consisted of internal compensation and benefits as lease origination activities were performed internally by the Company. Deferred lease costs capitalized prior to the adoption of the authoritative guidance on leases will be amortized on a straight-line basis over the remaining lease term. For all leases originated on or after January 1, 2019, subsequent to the adoption of authoritative guidance on leases, the incremental costs incurred by the Company to originate contracts with customers are capitalized as contract acquisition costs. Contract acquisition costs, which generally include commissions and other costs that are only incurred as a result of obtaining a contract, are capitalized when the incremental costs are expected to be recovered over the contract period. All other costs incurred regardless of obtaining a contract are expensed as incurred. Contract acquisition costs are amortized over the period the costs are expected to contribute directly or indirectly to future cash flows, which is generally over the contract term, on a basis consistent with the transfer of goods or services to the customer to which the costs relate. Contract acquisition costs, net as of March 31, 2019 and December 31, 2018 were $3.9 million and $3.7 million, respectively, and were recorded in other assets in the consolidated balance sheets. Contract Fulfillment Costs. Costs incurred by the Company to fulfill a contract with a customer and are capitalized when the costs generate or enhance resources that will be used in satisfying future performance obligations of the contract and the costs are expected to be recovered. Capitalized contract fulfillment costs generally include contracted services, direct labor, materials, and allocable overhead directly related to resources required to fulfill the contract, including shipping and installation activities. Contract fulfillment costs are amortized over the period the costs are expected to contribute directly or indirectly to future cash flows, which is generally over the contract term, on a basis consistent with the transfer of good or services to the customer to which the costs relate. Contract fulfillment costs, net as of March 31, 2019 and December 31, 2018 were $2.8 million and $1.5 million, respectively, and were recorded in other assets in the consolidated balance sheets. Total contract costs amortization expense for the three months ended March 31, 2019 and March 31, 2018 were $0.9 million and $0.6 million respectively. Contract costs are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company had no impairment charges related to contract costs during the three months ended March 31, 2019. |
Adoption of New Accounting Pronouncements | Adoption of New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board, or FASB, issued authoritative guidance regarding leases that requires lessees to recognize a lease liability and right‑of‑use asset for operating leases, with the exception of short‑term leases. In addition, lessor accounting was modified to align, where necessary, with lessee accounting modifications and the authoritative guidance regarding revenue from contracts with customers. During 2018, the FASB issued additional authoritative guidance which, among other things, provided an option to apply transition provisions under the standard at adoption date rather than the earliest comparative period presented as well as added a practical expedient that would permit lessors to not separate non-lease components from the associated lease components if certain conditions are met. These amendments are effective, in conjunction with the new lease standard, for annual reporting periods beginning on or after December 15, 2018, including interim periods within those annual periods. The Company adopted this guidance on a modified retrospective basis on January 1, 2019 with the cumulative effect of the transition as of the date of adoption. The Company has elected the package of practical expedients provided for within the authoritative guidance which exempts the Company from having to reassess: (i) whether expired or existing contracts contain leases, (ii) the lease classification for expired or existing leases, and (iii) initial direct costs for existing leases. In addition, the Company has elected the practical expedient that permits lessors to not separate non-lease components from the associated lease components if certain conditions are met. Lastly, the Company has utilized the short-term exemption for lessees and established an accounting policy to not recognize a right-of-use asset or lease liability for any lease with a term of less than 12 months. The Company did not elect to utilize any of the other practical expedients. The impacts of the new lease standard are as follows: Lessee accounting - The adoption has had a material impact on the consolidated balance sheets, including an increase to both assets and liabilities, as a result of the recognition of a right-of-use asset and corresponding lease liability for operating leases. As the Company has made a policy election for the short-term lease exemption, a right-of-use asset and corresponding lease liability are only recorded for leases with expected terms of more than 12 months. The adoption did not have a material impact on the consolidated statements of operations and comprehensive income for situations in which the Company is a lessee. Lessor accounting - As the Company has elected the transitional practical expedients for leases, there are not any material impacts to the consolidated financial statements for leases in situations which the Company is a lessor and the lease commenced prior to January 1, 2019. To conform with the guidance, the Company has updated its policies for costs incurred for the acquisition and fulfillment of the lease contracts, including commissions and installation costs. Adoption of the new lease standard did not impact our historically reported results. On January 1, 2019, the Company recorded $8.7 million of right-of-use assets and $8.9 million of operating lease liabilities, including the classification of $0.2 million from straight-line rent liabilities to operating lease liabilities, in the consolidated balance sheets. New Accounting Pronouncements to be Adopted In August 2018, the FASB issued authoritative guidance regarding implementation costs incurred in a cloud computing arrangement that is a service contract. This guidance will be effective for annual reporting periods beginning on or after December 15, 2019, including interim periods within those annual periods, and early adoption is permitted. The Company is currently evaluating the potential impact of the accounting and disclosure requirements on the consolidated financial statements. In March 2019, the FASB issued authoritative guidance regarding targeted changes to lessor accounting. This guidance will be effective for annual reporting periods beginning on or after December 15, 2019, including interim periods within those annual periods, and early adoption is permitted. |
Business Combinations and Ass_2
Business Combinations and Asset Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Pro Forma Financial Information | The following unaudited pro forma financial information (in thousands, except for per share amounts) for the Company gives effect to the acquisitions of: (i) PHSI, which occurred on December 18, 2018; (ii) Bluline, which occurred on December 3, 2018; (iii) AUC, which occurred on November 1, 2018; (iv) Alpine, which occurred on August 6, 2018; and (v) Wa-2, which occurred on March 1, 2018, as if each had occurred on January 1, 2018. These unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisitions occurred on the date indicated, or that may result in the future. Three months ended March 31, 2019 2018 Revenues $ 46,562 $ 44,410 Net loss $ (5,664) $ (10,005) Loss per share $ (0.21) $ (0.38) |
Pure Health Solutions, Inc | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Schedule of business combination purchase price allocation | The following table summarizes the preliminary purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination and liabilities assumed (in thousands): Assets acquired: Cash and cash equivalents $ 260 Trade receivables 1,167 Inventory 2,606 Prepaid expenses and other current assets 447 Property, plant and equipment 6,410 Deferred tax asset 108 Identified intangible assets 31,550 Goodwill 20,374 Total assets acquired 62,922 Liabilities assumed: Accounts payable and accrued liabilities (22,652) Deferred revenue (329) Other long-term liabilities (450) Total liabilities assumed (23,431) Total purchase price $ 39,491 |
FB Global Development, Inc., d/b/a Bluline | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Schedule of business combination purchase price allocation | The following table summarizes the preliminary purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed (in thousands): Assets acquired: Trade receivables $ 90 Inventory 345 Property, plant and equipment 331 Identified intangibles 1,462 Goodwill 645 Total assets acquired 2,873 Liabilities assumed: Deferred revenue (10) Total liabilities assumed (10) Total purchase price $ 2,863 |
AUC Acquisition Holdings | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Schedule of business combination purchase price allocation | The following table summarizes the preliminary purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed (in thousands): Assets acquired: Cash and cash equivalents $ 849 Trade receivables 1,763 Inventory 2,642 Current portion of long-term receivables 521 Prepaid expenses and other current assets 1,673 Property, plant and equipment 32,266 Other assets 25 Long-term receivables 306 Identified intangible assets 47,310 Goodwill 63,041 Total assets acquired 150,396 Liabilities assumed: Accounts payable and accrued liabilities (4,286) Deferred revenue (1,021) Other long-term liabilities (1,706) Deferred tax liability (12,483) Total liabilities assumed (19,496) Total purchase price $ 130,900 |
Alpine Water System, LLC | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Schedule of business combination purchase price allocation | The following table summarizes the purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed (in thousands), subject to measurement period adjustments: Assets acquired: Trade receivables $ 556 Inventory 141 Prepaid expenses and other current assets 153 Property, plant and equipment 1,562 Customer relationships 6,280 Non-compete agreements 1,149 Goodwill 6,006 Total assets acquired 15,847 Liabilities assumed: Accounts payable and accrued liabilities (295) Deferred revenue (565) Total liabilities assumed (860) Total purchase price $ 14,987 |
Wa-2 Water Company Ltd | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Schedule of business combination purchase price allocation | The following table summarizes the purchase price allocated to the fair value of assets acquired, including intangibles recorded in conjunction with the business combination, and liabilities assumed (in thousands): Assets acquired: Trade receivables $ 134 Inventory 158 Prepaid expenses and other current assets 6 Property, plant and equipment 424 Customer relationships 1,561 Trade names 700 Non-compete agreements 298 Goodwill 2,239 Total assets acquired 5,520 Liabilities assumed: Accounts payable and accrued liabilities (86) Deferred revenue (328) Total liabilities assumed (414) Total purchase price $ 5,106 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue | |
Schedule of disaggregation of revenues | The following table represents a disaggregation of revenue for the three months ended March 31, 2019 and 2018, along with the reportable segment for each category (in thousands): Three Months Ended March 31, 2019 Seven Seas Water Quench Total Bulk water Water delivery $ 8,713 $ — $ 8,713 Operating and maintenance 5,597 — 5,597 Total bulk water 14,310 — 14,310 Rental Lease of equipment 3,139 18,668 21,807 Total rental 3,139 18,668 21,807 Financing 972 — 972 Product sales Construction of plants 1,696 — 1,696 Sale of equipment, coffee and consumables — 7,777 7,777 Total product sales 1,696 7,777 9,473 Total revenues $ 20,117 $ 26,445 $ 46,562 Three Months Ended March 31, 2018 Seven Seas Water Quench Total Bulk water Water delivery $ 8,439 $ — $ 8,439 Operating and maintenance 5,257 — 5,257 Total bulk water 13,696 — 13,696 Rental Lease of equipment — 13,959 13,959 Total rental — 13,959 13,959 Financing 1,048 — 1,048 Product sales Construction of plants — — — Sale of equipment, coffee and consumables — 3,811 3,811 Total product sales — 3,811 3,811 Total revenues $ 14,744 $ 17,770 $ 32,514 |
Schedule of information and changes to contract assets and contract liabilities | The following table provides information about contract assets and contract liabilities from contracts with customers at March 31, 2019 and December 31, 2018 (in thousands): March 31, December 31, 2019 2018 Contract assets Trade receivables, net $ 22,578 $ 21,437 Current portion of long-term receivables 7,099 6,538 Long-term receivables 38,250 40,574 Total contract assets $ 67,927 $ 68,549 Contract liabilities Deferred revenue, current $ 4,298 $ 3,890 Deferred revenue, non-current 10,741 10,690 Total contract liabilities $ 15,039 $ 14,580 Significant changes in the contract asset and the contract liability balances during the period are as follows (in thousands): Three months ended Three months ended March 31, 2019 March 31, 2018 Contract assets Contract liabilities Contract assets Contract liabilities Revenue recognized that was included in the contract liability balance at January 1, 2018 $ — $ 4,197 $ — $ 2,733 Deferred revenue acquired during the period $ — $ — $ — $ (356) |
Schedule of the expected timing of satisfaction of the remaining performance obligations | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands). The estimated revenue does not include amounts of variable consideration, including revenues based on changes to consumer price indices that are constrained. In addition, the estimated revenue is based on current contracts with customers and does not take into consideration contract terms not legally enforceable with the customer. Remainder of 2019 $ 48,184 2020 $ 47,250 2021 $ 47,098 2022 $ 45,297 2023 $ 45,297 Thereafter $ 314,342 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurements | |
Schedule of fair value measurements | The Company’s fair value measurements as of March 31, 2019 and December 31, 2018 were as follows (in thousands): Quoted Prices in Significant Active Markets Other Significant Asset/ for Identical Observable Unobservable Assets/Liabilities Measured at Fair Value (Liability) Assets (Level 1) Inputs (Level 2) Inputs (Level 3) As of March 31, 2019 Recurring basis: Money market funds $ 4,089 $ 4,089 $ — $ — U.S. Treasury securities $ 30,080 $ 30,080 $ — $ — Acquisition contingent consideration $ 2,486 $ — $ — $ 2,486 As of December 31, 2018 Recurring basis: Money market funds $ 42,135 $ 42,135 $ — $ — Acquisition contingent consideration $ 3,109 $ — $ — $ 3,109 |
Lease (Tables)
Lease (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Summary of lease cost | The components of lease cost were as follows (in thousands): Three Months Ended March 31, 2019 Lease Cost Operating lease cost $ 717 Short-term lease cost 118 Variable lease cost 4 Total lease cost $ 839 |
Summary of maturities of operating lease liabilities | As of March 31, 2019, the maturities of the Company’s operating lease liabilities were as follows (in thousands): Remainder of 2019 $ 1,668 2020 1,684 2021 1,672 2022 1,561 2023 1,172 Thereafter 5,657 Total future minimum lease payments 13,414 Less imputed lease interest (4,508) Total lease liabilities $ 8,906 As of December 31, 2018, f uture minimum lease payments under non‑cancelable operating leases are summarized as follows (in thousands): 2019 $ 2,097 2020 905 2021 990 2022 856 2023 773 Thereafter 5,117 Total future minimum lease payments $ 10,738 |
Summary of components of lease income | The components of lease income were as follows (in thousands): Three Months Ended March 31, 2019 Lease income: sales-type leases Profit at lease commencement $ - Interest income on lease receivables 788 Total lease income: sales-type leases 788 Lease income: operating leases 21,807 Total lease income $ 22,595 |
Summary of future minimum rental revenues to be generated from the leased assets under non-cancelable operating leases | Future minimum rental revenues to be generated from the leased assets under non-cancelable operating leases are summarized as follows (in thousands): Remainder of 2019 $ 43,949 2020 $ 39,370 2021 $ 25,633 2022 $ 16,192 2023 $ 11,737 Thereafter $ 2,931 |
Summary of maturities of the Company’s sales-type lease receivables. | As of March 31, 2019, the maturities of the Company’s sales-type lease receivables are as follows (in thousands): Remainder of 2019 $ 603 2020 761 2021 600 2022 473 2023 409 Thereafter — Total future minimum lease payments 2,846 Less imputed lease interest (443) Total sales-type lease receivables $ 2,403 |
Loss per Share (Tables)
Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Loss per Share | |
Schedule of net loss per share | The following table provides information for calculating net loss applicable to ordinary shareholders (in thousands, except per share amounts): Three Months Ended March 31, 2019 2018 Numerator: Net loss $ (5,664) $ (6,346) Denominator: Weighted-average ordinary shares outstanding - basic and diluted 26,865 26,491 Loss per share - basic and diluted $ (0.21) $ (0.24) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure | |
Schedule of changes in acquisition contingent consideration | A reconciliation of the beginning and ending amounts of the acquisition contingent consideration is as follows (in thousands): Three Months Ended March 31, 2019 Acquisition contingent consideration at beginning of the period $ 3,109 Payments (670) Valuation adjustments 9 Interest accretion 38 Acquisition contingent consideration at end of the period $ 2,486 |
Cash Flow Information (Tables)
Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Cash Flow Information | |
Cash Flow Information | Supplemental cash flow information is as follows (in thousands): Three Months Ended March 31, 2019 2018 Cash paid during the period: Income taxes, net $ 876 $ 746 Interest, net $ 6,282 $ 3,030 Non-Cash Transaction Information: Right-of-use assets obtained in exchange for new operating lease liabilities $ 175 — Non-cash capital expenditures $ 1,264 $ 184 The components of total ending cash for the periods presented in the consolidated statement of cash flows are as follows (in thousands): As of March 31, 2019 2018 Cash and cash equivalents $ 47,357 $ 109,950 Restricted cash, current — 2,000 Restricted cash, non-current 4,211 4,010 Cash, cash equivalents and restricted cash $ 51,568 $ 115,960 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting | |
Schedule of information by reportable segment | The following table provides information by reportable segment and a reconciliation to the consolidated results for the three months ended March 31, 2019 and 2018 (in thousands): Three Months Ended March 31, 2019 Seven Seas Corporate Water Quench & Other Total Revenues: Bulk water $ 14,310 $ — $ — $ 14,310 Rental 3,139 18,668 — 21,807 Product sales 1,696 7,777 — 9,473 Financing 972 — — 972 Total revenues 20,117 26,445 — 46,562 Gross profit: Bulk water 7,728 — — 7,728 Rental 2,336 9,865 — 12,201 Product sales 293 3,121 — 3,414 Financing 972 — — 972 Total gross profit 11,329 12,986 — 24,315 Selling, general and administrative expenses 7,300 14,201 1,368 22,869 Income (loss) from operations 4,029 (1,215) (1,368) 1,446 Other expense, net (6,509) Loss before income tax expense (5,063) Income tax expense 601 Net loss $ (5,664) Other information: Depreciation and amortization $ 5,696 $ 6,262 $ — $ 11,958 Expenditures for long-lived assets $ 4,381 $ 2,796 $ — $ 7,177 Amortization of deferred financing fees $ 69 $ 51 $ 134 $ 254 Three Months Ended March 31, 2018 Seven Seas Corporate Water Quench & Other Total Revenues: Bulk water $ 13,696 $ — $ — $ 13,696 Rental — 13,959 — 13,959 Product sales — 3,811 — 3,811 Financing 1,048 — — 1,048 Total revenues 14,744 17,770 — 32,514 Gross profit: Bulk water 7,189 — — 7,189 Rental — 7,503 — 7,503 Product sales — 1,285 — 1,285 Financing 1,048 — — 1,048 Total gross profit 8,237 8,788 — 17,025 Selling, general and administrative expenses 7,603 10,719 1,252 19,574 Income (loss) from operations 634 (1,931) (1,252) (2,549) Other expense, net (3,390) Loss before income tax expense (5,939) Income tax expense 407 Net loss $ (6,346) Other information: Depreciation and amortization $ 3,564 $ 4,296 $ — $ 7,860 Expenditures for long-lived assets $ 515 $ 2,332 $ — $ 2,847 Amortization of deferred financing fees $ 66 $ 51 $ 122 $ 239 |
Description of the Business - C
Description of the Business - Corporate Reorganization (Details) | 3 Months Ended |
Mar. 31, 2019itemsegment | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Number of operating platforms | segment | 2 |
Quench | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Number of dealers and retailers | item | 250 |
Quench | Minimum | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Lease term | 2 years |
Quench | Maximum | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Lease term | 4 years |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases | |
Impairment charges on right-of-use assets | $ 0 |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Contract Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Capitalized Contract Cost [Line Items] | |||
Contract cost amortization | $ 900 | $ 600 | |
Contract assets impairment | 0 | $ 0 | |
Contract Acquisition Costs | |||
Capitalized Contract Cost [Line Items] | |||
Contract costs | 3,900 | $ 3,700 | |
Contract Fulfillment Costs | |||
Capitalized Contract Cost [Line Items] | |||
Contract costs | $ 2,800 | $ 1,500 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Adoption of New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
Other Nonoperating Income (Expense) [Abstract] | ||
Right-of-use assets | $ 8,549 | |
Lease liabilities | $ 8,906 | |
ASU 2016-02 | Adjustment | ||
Other Nonoperating Income (Expense) [Abstract] | ||
Right-of-use assets | $ 8,700 | |
Lease liabilities | 8,900 | |
Straight-line rent liabilities to operating lease liabilities | $ 200 |
Business Combinations and Ass_3
Business Combinations and Asset Acquisitions - Pure Health Solutions, Inc (Details) $ in Thousands | Dec. 18, 2018USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | ||||
Post combination payoff | $ 158 | |||
Assets acquired: | ||||
Goodwill | 191,178 | $ 190,999 | ||
Quench | Pure Health Solutions, Inc | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 57,000 | |||
Cash paid for acquisition | 39,500 | |||
Purchase price adjustment | 1,200 | |||
Post combination payoff | $ 17,500 | |||
Contract liabilities discount rate | 7 | |||
Transaction related costs | 100 | |||
Indemnification liability | $ 800 | |||
Indemnification asset | 800 | |||
Restructuring charges | 100 | |||
Restructuring accrual | $ 500 | $ 800 | ||
Assets acquired: | ||||
Cash and cash equivalents | 260 | |||
Trade receivables | 1,167 | |||
Inventory | 2,606 | |||
Prepaid expenses and other current assets | 447 | |||
Property, plant and equipment | 6,410 | |||
Deferred tax assets | 108 | |||
Identified intangible assets | 31,550 | |||
Goodwill | 20,374 | |||
Total assets acquired | 62,922 | |||
Liabilities assumed: | ||||
Accounts payable and accrued liabilities | (22,652) | |||
Deferred revenue | (329) | |||
Other long-term liabilities | (450) | |||
Total liabilities assumed | (23,431) | |||
Net assets acquired | $ 39,491 | |||
Quench | Pure Health Solutions, Inc | Forecast | ||||
Business Acquisition [Line Items] | ||||
Restructuring charges | $ 100 | |||
Quench | Pure Health Solutions, Inc | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Weighted average useful life of intangible assets | 20 years | |||
Quench | Pure Health Solutions, Inc | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Weighted average useful life of intangible assets | 12 years | |||
Quench | Pure Health Solutions, Inc | Non-compete agreements | ||||
Business Acquisition [Line Items] | ||||
Weighted average useful life of intangible assets | 5 years |
Business Combinations and Ass_4
Business Combinations and Asset Acquisitions - FB Global Development, Inc., d/b/a Bluline (Details) - USD ($) $ in Thousands | Dec. 03, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Assets acquired: | |||
Goodwill | $ 191,178 | $ 190,999 | |
Quench | FB Global Development, Inc., d/b/a Bluline | |||
Business Acquisition [Line Items] | |||
Cash paid for acquisition | $ 2,500 | ||
Acquisition payable | 300 | ||
Transaction related costs | $ 0 | ||
Assets acquired: | |||
Trade receivables | 90 | ||
Inventory | 345 | ||
Property, plant and equipment | 331 | ||
Identified intangible assets | 1,462 | ||
Goodwill | 645 | ||
Total assets acquired | 2,873 | ||
Liabilities assumed: | |||
Deferred revenue | (10) | ||
Total liabilities assumed | (10) | ||
Net assets acquired | $ 2,863 | ||
Quench | FB Global Development, Inc., d/b/a Bluline | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Weighted average useful life of intangible assets | 20 years | ||
Quench | FB Global Development, Inc., d/b/a Bluline | Non-compete agreements | |||
Business Acquisition [Line Items] | |||
Weighted average useful life of intangible assets | 5 years |
Business Combinations and Ass_5
Business Combinations and Asset Acquisitions - AUC Acquisition Holdings (Details) - USD ($) $ in Thousands, shares in Millions | Nov. 01, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Contingent consideration | $ 2,486 | $ 3,109 | |
Assets acquired: | |||
Goodwill | 191,178 | $ 190,999 | |
AUC Acquisition Holdings | |||
Business Acquisition [Line Items] | |||
Transaction related costs | $ 100 | ||
AquaVenture Holdings, Inc. | AUC Acquisition Holdings | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 130,900 | ||
Cash paid for acquisition | 127,000 | ||
Working capital adjustment | $ 400 | ||
Number of shares issued in acquisition | 122 | ||
Value of shares issued in acquisition | $ 2,000 | ||
Contingent consideration | 1,900 | ||
Contingent consideration range of outcomes minimum | 0 | ||
Contingent consideration range of outcomes maximum | 2,000 | ||
Assets acquired: | |||
Cash and cash equivalents | 849,000 | ||
Trade receivables | 1,763,000 | ||
Inventory | 2,642,000 | ||
Current portion of long-term receivables | 521,000 | ||
Prepaid expenses and other current assets | 1,673,000 | ||
Property, plant and equipment | 32,266,000 | ||
Other assets | 25,000 | ||
Long-term receivables | 306,000 | ||
Identified intangible assets | 47,310,000 | ||
Goodwill | 63,041,000 | ||
Total assets acquired | 150,396,000 | ||
Liabilities assumed: | |||
Accounts payable and accrued liabilities | (4,286,000) | ||
Deferred revenue | (1,021,000) | ||
Other long-term liabilities | (1,706,000) | ||
Deferred tax liabilities | (12,483,000) | ||
Total liabilities assumed | (19,496,000) | ||
Net assets acquired | $ 130,900,000 | ||
AquaVenture Holdings, Inc. | AUC Acquisition Holdings | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Weighted average useful life of intangible assets | 20 years | ||
AquaVenture Holdings, Inc. | AUC Acquisition Holdings | Trade Names | |||
Business Acquisition [Line Items] | |||
Weighted average useful life of intangible assets | 15 years | ||
AquaVenture Holdings, Inc. | AUC Acquisition Holdings | Non-compete agreements | |||
Business Acquisition [Line Items] | |||
Weighted average useful life of intangible assets | 4 years 10 months 24 days | ||
AquaVenture Holdings, Inc. | AUC Acquisition Holdings | Backlogs | |||
Business Acquisition [Line Items] | |||
Weighted average useful life of intangible assets | 8 months 12 days |
Business Combinations and Ass_6
Business Combinations and Asset Acquisitions - Alpine Water System, LLC (Details) - USD ($) $ in Thousands | Aug. 06, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Contingent consideration | $ 2,486 | $ 3,109 | |
Assets acquired: | |||
Goodwill | 191,178 | $ 190,999 | |
Alpine Water System, LLC | Selling, General and Administrative Expenses | |||
Business Acquisition [Line Items] | |||
Transaction related costs | 200 | ||
Quench | Alpine Water System, LLC | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 15,000 | ||
Cash paid for acquisition | 14,500 | ||
Working capital adjustment | 100 | ||
Notes payable | 400 | ||
Contingent consideration | 100 | ||
Contingent consideration range of outcomes minimum | 0 | ||
Contingent consideration range of outcomes maximum | 300 | ||
Contingent consideration ultimate payout | $ 400 | ||
Assets acquired: | |||
Trade receivables | 556 | ||
Inventory | 141 | ||
Prepaid expenses and other current assets | 153 | ||
Property, plant and equipment | 1,562 | ||
Goodwill | 6,006 | ||
Total assets acquired | 15,847 | ||
Liabilities assumed: | |||
Accounts payable and accrued liabilities | (295) | ||
Deferred revenue | (565) | ||
Total liabilities assumed | (860) | ||
Net assets acquired | 14,987 | ||
Quench | Alpine Water System, LLC | Minimum | |||
Business Acquisition [Line Items] | |||
Undiscounted range of outcomes for the post combination compensation payout | 0 | ||
Quench | Alpine Water System, LLC | Maximum | |||
Business Acquisition [Line Items] | |||
Undiscounted range of outcomes for the post combination compensation payout | 1,100 | ||
Quench | Alpine Water System, LLC | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Discounted rate | 13.40% | ||
Weighted average useful life of intangible assets | 15 years | ||
Assets acquired: | |||
Identified intangible assets | 6,280 | ||
Quench | Alpine Water System, LLC | Non-compete agreements | |||
Business Acquisition [Line Items] | |||
Discounted rate | 13.40% | ||
Weighted average useful life of intangible assets | 5 years | ||
Assets acquired: | |||
Identified intangible assets | $ 1,149 |
Business Combinations and Ass_7
Business Combinations and Asset Acquisitions - Wa-2 Water Company Ltd (Details) - USD ($) $ in Thousands | Mar. 01, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Assets acquired: | ||||
Goodwill | $ 191,178 | $ 190,999 | ||
Quench Canada Inc | Wa-2 Water Company Ltd | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 5,100 | |||
Amount held in escrow by third party | $ 300 | |||
Escrow deposit period | 1 year | |||
Working capital adjustment | $ 5,000 | |||
Transaction related costs | $ 0 | $ 100 | ||
Assets acquired: | ||||
Trade receivables | 134 | |||
Inventory | 158 | |||
Prepaid expenses and other current assets | 6 | |||
Property, plant and equipment | 424 | |||
Goodwill | 2,239 | |||
Total assets acquired | 5,520 | |||
Liabilities assumed: | ||||
Accounts payable and accrued liabilities | (86) | |||
Deferred revenue | (328) | |||
Total liabilities assumed | (414) | |||
Net assets acquired | 5,106 | |||
Quench Canada Inc | Wa-2 Water Company Ltd | Customer Relationships | ||||
Assets acquired: | ||||
Identified intangible assets | 1,561 | |||
Liabilities assumed: | ||||
Discounted rate | 12.90% | |||
Weighted average useful life of intangible assets | 20 years | |||
Quench Canada Inc | Wa-2 Water Company Ltd | Trade Names | ||||
Assets acquired: | ||||
Identified intangible assets | 700 | |||
Liabilities assumed: | ||||
Discounted rate | 12.90% | |||
Weighted average useful life of intangible assets | 12 years | |||
Quench Canada Inc | Wa-2 Water Company Ltd | Non-compete agreements | ||||
Assets acquired: | ||||
Identified intangible assets | $ 298 | |||
Liabilities assumed: | ||||
Discounted rate | 12.90% | |||
Weighted average useful life of intangible assets | 5 years |
Business Combinations and Ass_8
Business Combinations and Asset Acquisitions - Proforma financial information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Revenues | $ 46,562 | $ 44,410 |
Net loss | $ (5,664) | $ (10,005) |
Loss per share | $ (0.21) | $ (0.38) |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 46,562 | $ 32,514 | $ 32,514 |
Bulk water | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 14,310 | 13,696 | 13,696 |
Water Delivery | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 8,713 | 8,439 | |
Operating and maintenance | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 5,597 | 5,257 | |
Rental | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 21,807 | 13,959 | 13,959 |
Lease Of Equipment | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 21,807 | 13,959 | |
Financing | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 972 | 1,048 | 1,048 |
Product sales | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 9,473 | $ 3,811 | 3,811 |
Construction of plants | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 1,696 | ||
Sale of equipment, coffee and consumables | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 7,777 | 3,811 | |
Seven Seas Water | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 20,117 | 14,744 | |
Seven Seas Water | Bulk water | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 14,310 | 13,696 | |
Seven Seas Water | Water Delivery | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 8,713 | 8,439 | |
Seven Seas Water | Operating and maintenance | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 5,597 | 5,257 | |
Seven Seas Water | Rental | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 3,139 | ||
Seven Seas Water | Lease Of Equipment | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 3,139 | ||
Seven Seas Water | Financing | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 972 | 1,048 | |
Seven Seas Water | Product sales | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 1,696 | ||
Seven Seas Water | Construction of plants | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 1,696 | ||
Quench | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 26,445 | 17,770 | |
Quench | Rental | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 18,668 | 13,959 | |
Quench | Lease Of Equipment | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 18,668 | 13,959 | |
Quench | Product sales | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 7,777 | 3,811 | |
Quench | Sale of equipment, coffee and consumables | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 7,777 | $ 3,811 |
Revenue - Contract Assets And L
Revenue - Contract Assets And Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Contract assets | |||
Trade receivables, net | $ 22,578 | $ 21,437 | |
Current portion of long-term receivables | 7,099 | 6,538 | |
Long-term receivables | 38,250 | 40,574 | |
Total contract assets | 67,927 | 68,549 | |
Contract liabilities | |||
Deferred revenue, current | 4,298 | 3,890 | |
Deferred revenue, non-current | 10,741 | 10,690 | |
Total contract liabilities | 15,039 | $ 14,580 | |
Changes in contract assets and liabilities | |||
Revenue recognized that was included in the contract liability balance at January 1, 2018 | 4,197 | $ 2,733 | |
Deferred revenue acquired during the period | (356) | ||
Contract assets impairment | $ 0 | $ 0 |
Revenue - Performance Obligatio
Revenue - Performance Obligations (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation expected timing of satisfaction period | 9 months |
Revenue, remaining performance obligation | $ 48,184 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation expected timing of satisfaction period | 1 year |
Revenue, remaining performance obligation | $ 47,250 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation expected timing of satisfaction period | 1 year |
Revenue, remaining performance obligation | $ 47,098 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation expected timing of satisfaction period | 1 year |
Revenue, remaining performance obligation | $ 45,297 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation expected timing of satisfaction period | 1 year |
Revenue, remaining performance obligation | $ 45,297 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation expected timing of satisfaction period | |
Revenue, remaining performance obligation | $ 314,342 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Asset transfers out of Level 1 into Level 2 | $ 0 | |
Assets transfers out of Level 2 into Level 1 | 0 | |
Asset transfers into (out of) Level 3 | 0 | |
Acquisition contingent consideration | 2,486 | $ 3,109 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Money market funds | 4,089 | 42,135 |
Acquisition contingent consideration | 2,486 | 3,109 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Money market funds | 4,089 | 42,135 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Acquisition contingent consideration | 2,486 | $ 3,109 |
Recurring | US Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Held-to-maturity securities | 30,080 | |
Recurring | US Treasury securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Held-to-maturity securities | $ 30,080 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease Cost | |
Operating lease cost | $ 717 |
Short-term lease cost | 118 |
Variable lease cost | 4 |
Total lease cost | $ 839 |
Weighted-average remaining lease term | 8 years |
Weighted-average remaining lease term | 9.90% |
Cash paid for operating lease | $ 500 |
Leases - Maturities of operatin
Leases - Maturities of operating lease liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Lease Liabilities, Payments Due [Abstract] | ||
Remainder of 2019 | $ 1,668 | |
2020 | 1,684 | |
2021 | 1,672 | |
2022 | 1,561 | |
2023 | 1,172 | |
Thereafter | 5,657 | |
Total future minimum lease payments | 13,414 | |
Less imputed lease interest | (4,508) | |
Total lease liabilities | $ 8,906 | |
2019 | $ 2,097 | |
2020 | 905 | |
2021 | 990 | |
2022 | 856 | |
2023 | 773 | |
Thereafter | 5,117 | |
Total | $ 10,738 |
Leases - Lease Income (Details)
Leases - Lease Income (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease income: sales-type leases | |
Interest income on lease receivables | $ 788 |
Total lease income: sales-type leases | 788 |
Lease income: operating leases | 21,807 |
Total lease income | $ 22,595 |
Leases - Future minimum rental
Leases - Future minimum rental revenues (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Future minimum rental revenues to be generated from the leased assets under non-cancelable operating | |
Remainder of 2019 | $ 43,949 |
2020 | 39,370 |
2021 | 25,633 |
2022 | 16,192 |
2023 | 11,737 |
Thereafter | $ 2,931 |
Leases - sales-type lease recei
Leases - sales-type lease receivables (Details) $ in Thousands | Mar. 31, 2019USD ($) |
sales-type lease receivables | |
Remainder of 2019 | $ 603 |
2020 | 761 |
2021 | 600 |
2022 | 473 |
2023 | 409 |
Total future minimum lease payments | 2,846 |
Less imputed lease interest | (443) |
Total sales-type lease receivables | $ 2,403 |
Share-based Compensation - Aqua
Share-based Compensation - AquaVenture Equity Awards (Details) shares in Millions, $ in Millions | Jan. 01, 2018 | Mar. 31, 2019USD ($)shares | Dec. 31, 2018shares |
Restricted share units | |||
Granted in period | 0.4 | ||
Restricted share units granted | $ | $ 7.6 | ||
Restricted share units | First Anniversary | |||
Vesting Percentage | 25.00% | ||
Restricted share units | Thereafter | |||
Vesting Percentage | 75.00% | ||
Vesting Period | 3 years | ||
2016 Plan | |||
Aggregate number of shares by class authorized for grant under the Equity Incentive Plan | 8.2 | 5 | |
Annual percentage increase in shares available for issuance | 4 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Awards Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | $ 1,000 | $ 3,300 | |
Tax benefit | $ 0 | 0 | |
2016 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of ordinary shares authorized for issuance | 8,200,000 | 5,000,000 | |
Restricted share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted | 400,000 | ||
Thereafter | Restricted share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting Period | 3 years | ||
2016 ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of ordinary shares authorized for issuance | 900,000 | ||
2016 ESPP | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of purchase price of ordinary shares | 85.00% | ||
Independent Directors Deferred Compensation Program | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Phantom shares awarded percentage | 120.00% | ||
Phantom shares in equivalent ordinary shares | 1 | ||
Vesting Period | 0 years | ||
Independent Directors Deferred Compensation Program | Phantom Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Phantom shares in equivalent ordinary shares | 4,000 | ||
Requisite service period | 12 months | ||
Granted | 19,000 | ||
Aggregate fair value | $ 400 | ||
Forfeited | 9,000 | ||
Ordinary shares issued | $ 4 | ||
Number of shares outstanding | 53,000 | ||
Independent Directors Deferred Compensation Program | First Anniversary | Phantom Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted | 17,000 | ||
Independent Directors Deferred Compensation Program | Thereafter | Phantom Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted | 2,000 | ||
Selling, General and Administrative Expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | $ 900 | 3,200 | |
Cost of revenues | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | $ 100 | $ 100 |
Loss per Share (Details)
Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net loss | $ (5,664) | $ (6,346) |
Denominator: | ||
Weighted-average ordinary shares outstanding - basic and diluted | 26,865 | 26,491 |
Loss per share - basic and diluted | $ (0.21) | $ (0.24) |
Weighted average outstanding share awards excluded from the calculation of diluted earnings per share | 4,200 | 4,100 |
Commitments and Contingencies -
Commitments and Contingencies - Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Accretion of obligation | $ 13 | $ 12 | |
Valuation adjustment | 24 | $ 0 | |
Accrued Liabilities | |||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Current portion of the ARO liabilities | 600 | $ 700 | |
Other Noncurrent Liabilities | |||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Long-term portion of the ARO liabilities | $ 500 | $ 500 |
Commitments and Contingencies-
Commitments and Contingencies- Acquisition Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Business Acquisition, Contingent Consideration [Line Items] | |||
Acquisition contingent consideration at beginning of year | $ 3,109 | ||
Payments of acquisition contingent consideration | (670) | ||
Valuation adjustments | 9 | ||
Interest accretion | 38 | $ 0 | |
Acquisition contingent consideration at end of year | 2,486 | ||
Final purchase price allocation adjustments | (55) | ||
Remaining balance of the acquisition contingent consideration | 2,400 | $ 2,700 | |
Business Combination, Contingent Consideration, Liability, Noncurrent | 100 | $ 400 | |
Selling, General and Administrative Expenses | |||
Business Acquisition, Contingent Consideration [Line Items] | |||
Valuation adjustments | $ 64 |
Cash Flow Information (Details)
Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash paid during the period: | ||||
Income taxes, net | $ 876 | $ 746 | ||
Interest, net | 6,282 | 3,030 | ||
Non-Cash Transaction Information: | ||||
Right-of-use assets obtained in exchange for new operating lease liabilities | 175 | |||
Non-cash capital expenditures | 1,264 | 184 | ||
Components of Total Ending Cash | ||||
Cash and cash equivalents | 47,357 | 109,950 | $ 56,618 | |
Restricted cash, current | 2,000 | |||
Restricted cash, non-current | 4,211 | 4,010 | 4,153 | |
Cash, cash equivalents and restricted cash | $ 51,568 | $ 115,960 | $ 60,771 | $ 122,359 |
Segment Reporting - Information
Segment Reporting - Information by Reportable Segment (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Reportable segment and reconciliation | |||
Number of operating segments | segment | 2 | ||
Number of reportable segments | segment | 2 | ||
Total revenues | $ 46,562 | $ 32,514 | $ 32,514 |
Total gross profit | 24,315 | 17,025 | |
Selling, general and administrative expenses | 22,869 | 19,574 | |
Income (loss) from operations | 1,446 | (2,549) | |
Other expense, net | (6,509) | (3,390) | |
Loss before income tax expense | (5,063) | (5,939) | |
Income tax expense | 601 | 407 | |
Net loss | (5,664) | (6,346) | |
Other information: | |||
Depreciation and amortization | 11,958 | 7,860 | |
Expenditures for long-lived assets | 7,177 | 2,847 | |
Amortization of deferred financing fees | 254 | 239 | |
Corporate and other | |||
Reportable segment and reconciliation | |||
Selling, general and administrative expenses | 1,368 | 1,252 | |
Income (loss) from operations | (1,368) | (1,252) | |
Other information: | |||
Amortization of deferred financing fees | 134 | 122 | |
Seven Seas Water | |||
Reportable segment and reconciliation | |||
Total revenues | 20,117 | 14,744 | |
Seven Seas Water | Operating Segments | |||
Reportable segment and reconciliation | |||
Total revenues | 20,117 | 14,744 | |
Total gross profit | 11,329 | 8,237 | |
Selling, general and administrative expenses | 7,300 | 7,603 | |
Income (loss) from operations | 4,029 | 634 | |
Other information: | |||
Depreciation and amortization | 5,696 | 3,564 | |
Expenditures for long-lived assets | 4,381 | 515 | |
Amortization of deferred financing fees | 69 | 66 | |
Quench | |||
Reportable segment and reconciliation | |||
Total revenues | 26,445 | 17,770 | |
Quench | Operating Segments | |||
Reportable segment and reconciliation | |||
Total revenues | 26,445 | 17,770 | |
Total gross profit | 12,986 | 8,788 | |
Selling, general and administrative expenses | 14,201 | 10,719 | |
Income (loss) from operations | (1,215) | (1,931) | |
Other information: | |||
Depreciation and amortization | 6,262 | 4,296 | |
Expenditures for long-lived assets | 2,796 | 2,332 | |
Amortization of deferred financing fees | 51 | 51 | |
Bulk water | |||
Reportable segment and reconciliation | |||
Total revenues | 14,310 | 13,696 | 13,696 |
Total gross profit | 7,728 | 7,189 | |
Bulk water | Seven Seas Water | |||
Reportable segment and reconciliation | |||
Total revenues | 14,310 | 13,696 | |
Bulk water | Seven Seas Water | Operating Segments | |||
Reportable segment and reconciliation | |||
Total revenues | 14,310 | 13,696 | |
Total gross profit | 7,728 | 7,189 | |
Rental | |||
Reportable segment and reconciliation | |||
Total revenues | 21,807 | 13,959 | 13,959 |
Total gross profit | 12,201 | 7,503 | |
Rental | Seven Seas Water | |||
Reportable segment and reconciliation | |||
Total revenues | 3,139 | ||
Rental | Seven Seas Water | Operating Segments | |||
Reportable segment and reconciliation | |||
Total revenues | 3,139 | ||
Total gross profit | 2,336 | ||
Rental | Quench | |||
Reportable segment and reconciliation | |||
Total revenues | 18,668 | 13,959 | |
Rental | Quench | Operating Segments | |||
Reportable segment and reconciliation | |||
Total revenues | 18,668 | 13,959 | |
Total gross profit | 9,865 | 7,503 | |
Product sales | |||
Reportable segment and reconciliation | |||
Total revenues | 9,473 | 3,811 | 3,811 |
Total gross profit | 3,414 | 1,285 | |
Product sales | Seven Seas Water | |||
Reportable segment and reconciliation | |||
Total revenues | 1,696 | ||
Product sales | Seven Seas Water | Operating Segments | |||
Reportable segment and reconciliation | |||
Total revenues | 1,696 | ||
Total gross profit | 293 | ||
Product sales | Quench | |||
Reportable segment and reconciliation | |||
Total revenues | 7,777 | 3,811 | |
Product sales | Quench | Operating Segments | |||
Reportable segment and reconciliation | |||
Total revenues | 7,777 | 3,811 | |
Total gross profit | 3,121 | 1,285 | |
Financing | |||
Reportable segment and reconciliation | |||
Total revenues | 972 | 1,048 | 1,048 |
Total gross profit | 972 | 1,048 | |
Financing | Seven Seas Water | |||
Reportable segment and reconciliation | |||
Total revenues | 972 | $ 1,048 | |
Financing | Seven Seas Water | Operating Segments | |||
Reportable segment and reconciliation | |||
Total revenues | 972 | 1,048 | |
Total gross profit | $ 972 | $ 1,048 |